Desperate measures

First, housebuilders are successfully rebutting the charge that they are hoarding land and are instead focusing attention on the inefficiencies of the planning system. But, second, that any action to loosen the planning collar may come at a price: a wealth tax on homes built in lucrative markets such as London.

The background to the Treasury-sponsored Barker review is the universally accepted fact

that we are experiencing a housing shortage that threatens to cripple the British economy. We need to find an extra 55,000 homes a year to keep pace with the rate of household formation, and to give key workers such as nurses and teachers in inner-city areas somewhere to live. In their submissions to Barker, the RICS and others claim that housebuilders could easily increase the rate at which they build such accommodation, but are cynically “controlling supply” to inflate their profits and share prices. The Council for the Protection of Rural England says there are enough consents to build a single terrace from Land’s End to John O’Groats. Maybe so. But what then? Housebuilders’ businesses aren’t sustainable without a consistent supply of appropriate land, and they’ve sought to demonstrate that there isn’t enough to go round by privately disclosing their landbanks to Barker.

If you can’t blame the housebuilders for not wanting to build homes, you have to blame the planners for not approving them. The House Builders Federation’s submission to Barker makes a cogent case for reconfiguring the whole planning system, and with it all the government’s shibboleths, from the 60% brownfield target to one-size-fits-all densities. But the hiatus would have the serious drawback of giving nimby councils another excuse to defer applications. No, the system needs a quick fix – from above. John Prescott, who is Barker’s co-sponsor, must simply tell councils how many homes to approve, and by when. If they resist, he must wave housebuilders’ schemes through on appeal. Quite apart from increasing the number of homes built, this blunt instrument would encourage small housebuilders back into the market after they were forced out by the complexities of the present regime.

That said, Barker is unlikely to deliver a housebuilders’ Charter. There has to be a catch, and it looks like the wealth (or betterment) tax. It will be unpopular (all taxes are), it will be criticised as unfair – with higher costs, profits in London are not necessarily higher than anywhere else – and may threaten marginal developments. But it can’t be any worse than

the legalised extortion of 106 agreements. And if the proceeds are used to provide hefty mortgage subsidies for nurses there may be significant social benefits. We will find out how radical Barker is going to be when she presents her initial findings to Gordon Brown in November – and whether the government has the courage to face down the nimbys and risk an electoral backlash. But right now, it’s safe to assume she has grasped one thing at least:

we can’t go on as we are.