Housebuilders welcome olive branch from Prescott

Housebuilders have reacted positively to signals from the government that it wants to work with the industry to achieve its target of building 200,000 extra houses in the South-east by 2016.

Delegates at the Delivering Sustainable Communities Summit in Manchester this week noted that deputy prime minister John Prescott’s speech adopted a conciliatory tone. Prescott said the private sector was crucial in delivering affordable housing. In the past he has criticised housebuilders for their high construction costs, low output and excessive profits.

Prescott said that the government was increasingly aware that a “one size fits all” approach, whether interventionist or free market-led, would not work. He added that the industry to continue the drive to build sustainability into the construction process.

The government’s charm offensive was underlined by the presence of prime minister Tony Blair, who made a point of visiting housebuilders’ stands. In his speech, Blair told the conference: “Urban regeneration will happen only when the right partners come together and decide they can do it together.”

One housebuilder said the government had undergone “a distinct change of attitude” since Christmas. He said: “It’s finally cottoned on that if it wants to build more homes then who is going to do for them if not housebuilders?”

Alan Cherry, Countryside Properties chairman, said that the attendance of Blair and Cabinet ministers Gordon Brown, Charles Clarke, Margaret Beckett and Ruth Kelly had reassured industry leaders that the government was committed.

Cherry said: “Blair’s attendance indicates the importance that the government places on regeneration, sustainable communities and enhancing existing communities.

The emphasis being given to this is hugely encouraging. Prescott’s passion is really deep-rooted.”

However, Cherry added that the government had to commit itself to providing infrastructure. He said: “Major projects are being held up by the need for highways improvements and transport. The government has got to bite the bullet and recognise that investment is needed.”

Other housebuilders were equally positive. Philip Davies, chief executive of Linden Homes, said: “Blair got the political message almost right, but the government has still to convince the nimbys that something has got to happen.”

David Broadbent, regional chairman of Persimmon Homes, said the presence of the prime minister had added political weight to the conference. He said: “From what Blair and Prescott have said, housing will remain high on the agenda.”

Ministers also commented on the general framework for regeneration set out in the ODPM’s five-year plan, People, Places and Prosperity.

Blair said local communities rather than central government should take the initiative in running regeneration; Whitehall’s role was to set the regulatory and funding framework. He said: “Local people, with their skills and leadership, often put national leaders to shame.”

Chancellor Gordon Brown echoed this emphasis on devolving power. He said: “Finance ministers are now recognising that policy should be more about what I call the third stage of British regional and urban policy, where the new emphasis is about local action.”

Brown said communities would benefit from tax credits to clean up contaminated land, as well as VAT reductions to encourage the renovation of existing properties.

One of the government’s main tools for making its policy affordable is the adoption of a “£60,000 house” built from prefabricated modules. The idea was demonstrated at the conference by PRP’s design for a three-storey house using the Fusion method of construction.

Trevor Beattie, EP’s director of corporate strategy, said the house cost £90,000, but the £60,000 target could be attained with some modifications.

He said: “We’ve been told that the three-storey house is the hardest one to put up. The ones we’ll use at Allerton Bywater [where a row of £60,000 terrace houses will be assembled] will be two storeys.”

EP is running a competition in which one-third of houses in an estate of 1000 would be priced at £60,000. Three test sites have been allocated on government land that is held in trust.

Many housebuilders are preparing entries for the competition, although several are worried about infrastructure problems. Peter Redfern, managing director of George Wimpey, said his firm was holding back until it was clear where money for this would come from.