Fix planning to fix housing? It’s just a mantra, not the truth

Let’s get the bad news out of the way first, shall we? Better news later. The housing crisis is not for fixing. Not by “fixing” planning, at any rate. Not while private output is tied to economic growth, which it is. Not while public output is tied to private output, which it is.

Labour’s five-year 1.5 million homebuilding target cannot be met. The party would be wise to reframe the political narrative to “providing land” for that many homes. Then at least non-providing builders can be blamed.

You can only “bulldoze” planning in an autocracy. Keir Starmer’s ill-advised remark suggests, once again, that volume housebuilders have infiltrated Labour. Two decades ago, planning reform turned out to be a putty key for the building of 300,000 homes a year. The Conservatives tore away red tape a decade later, and still the needle didn’t move. This is for the simple reason that builders only build houses when there is a prospect of profit.

Noble Francis, economics director of the Construction Products Association, put together a spreadsheet for me correlating private completions and GDP growth since 2001. The answer is 0.77 – in statistician-speak, that’s a strong relationship. You would have to be dumb or a dissembler to say otherwise. Private completions rose from 153,000 in 2001 to 196,000 by 2007, then collapsed along with the economy to 121,000 by 2013. Then rose again to 172,000 by 2023, then fell to 144,000 last year.

The truth is different, and better: an efficient planning system can boost economic growth if used proactively to encourage infrastructure projects… Build roads, and houses will come

Yet the mantra that “fixing planning will fix housing” continues to mesmerise both main parties. The truth is different, and better: an efficient planning system can boost economic growth if used proactively to encourage infrastructure projects.

Labour seems to have got this and is making encouraging noises. Recast the rules with roads and bridges in mind, not houses. Build roads, and houses will come. More important, fix local planning departments, enfeebled by decades of neglect.

This deterioration of the planning function drip-fuels rage. A saint would be angered by the pace at which applications are progressed. Why can’t the box-ticking be left until after the “can we build this here?” question is answered.

Volume builders cope; the number of plots they hold with full permission rarely falls. But smaller builders have real cause to complain. The one exception to the principle that fixing planning won’t bring more homes is the SME sector. The rules need fixing in their favour.

Let’s get positive

Right, let’s get positive. Vistry is now nearly twice the size of Barratt and Persimmon. The group made up from Bovis and Try is aiming to build 18,000 homes this year. Last year it merged private sales into the “partnership” division, which builds “affordable mixed-tenure” homes. Houses financed by others seeking stable rental income.

Rival housebuilders are now thinking: forget dealing with penurious housing associations, let’s do this ourselves in partnership with those with real money. It feels like a pretty momentous move.

Now, some self-dealing. Forget top-down targets. How about some bottom-up encouragement? Last year Jackie Sadek, my partner in the Home Truths podcast, and I came up with a report for think tank Localis entitled Public Rental Homes.

The land for public rental housing sites comes from councils, the state or private owners. Subsidies or grants are fed into site-by-site appraisals to reach an agreed level of social rent homes. The builder then takes 100% of the risk and 100% of the profit. The council gets half-price homes, free of construction risk.

Housebuilders are now thinking: forget dealing with penurious housing associations, let’s do this ourselves in partnership with those with real money. It feels like a pretty momentous move

Yes, it’s more complicated than I suggest – nimby councillors being the main threat. But a more worked-through variant that includes input from finance experts could be a blueprint for a plan that would require councils to identify sites and prepare plans to house half those on today’s waiting list by 2030. A target more reachable, and more inspiring, than promising 1.5 million new homes.

Which leads to the last bit of positive news, inspired by listening to Darren Rodwell in one of our recent Home Truths podcast.

>> Also read: General election 2024: who will get your vote?

The leader of Barking and Dagenham council is aiming to build 50,000 new homes across the borough by 2037. Around 5,000 are due to be built by 2026. A further 27,000 are in planning. Rodwell’s shock withdrawal as the parliamentary candidate for Barking this week has robbed Labour of much needed experience on housing. 

What came over during the interview with Rodwell was his pragmatism. The Barking model allows for six levels of tenure, from half-market rent up to right to buy. No more single-tenure council estates in Barking and Dagenham, if you please.

There is no room here to run through Rodwell’s plan for revitalising affordable housing across the nation – but have a listen to the podcast. Although his prospects of a seat in the Commons have now vanished, his work in east London continues. He does hark back 100 years to the days when the cry for decent housing led to generous space and density standards, which shaped council housing for 50 years.

Rodwell talks fluently of equity bonds and public pension fund investment, and the “disgrace” of the permitted development rights, which permit substandard homes to be provided without planning approval. “You ought to bottle all that and sell it,” concluded my podcast co-host Jackie. Might Labour still buy?

Peter Bill is joint author (with Jackie Sadek) of Broken Homes, author of Planet Property, a former editor of Building and of Estates Gazette, and a former Evening Standard columnist. He is also joint podcast host with Jackie Sadek of the Home Truths podcast, for Building and Housing Today