The Centre for Policy Studies has published The Housing Guarantee report calling for SME housebuilders to play a far greater role in housing, helping to boost housing delivery rather than housing permissions.
For the last 60 years housing supply has fallen consecutively, with remedies focusing on boosting planning permissions to drive an increase in housing delivery. However, 2010’s planning reforms resulted in permissions rising to 350,000, although only 200,000 of these were actually built out.
The new report, The Housing Guarantee, calls for a series of reforms to the planning system to link permissions with delivery contracts linked to a build out time. This would help break the stranglehold that the major housebuilders have over the market:
“The six biggest house builders alone currently have roughly 1 million plots in their strategic land banks, close to the equivalent of the required five-year land supply across England that the system aims to deliver.” The Housing Guarantee
It puts forward an argument that failure to build out these permissions would result in the permissioned land being passed on to SMEs, at an agreed price. This would ensure that permissions always translated into housing delivery. Where SME housebuilders took up the offer of land, the report proposes to waterfall the option to custom and self builders.
However, as SME builders are the companies that deliver custom and self build plots, this seems an unnecessary step in a process designed to speed up output.
To support this, The Housing Guarantee calls for a renewed emphasis on the Housing Delivery Test, to ensure that assessment was based on the number of homes delivered and not on permissions granted. It also calls for councils to be penalised where homes aren’t delivered, in an effort to increase the speed, and diversity, of build out.
The report also calls for a panel of local SME housebuilders, who would be the first in line when public sector land was brought to market.
The recommendations in the paper would ensure that local plans contribute, reliably, to the delivery of housing, rather than obsessing on the issue of land with no correlation to actual housing supply. This would make planning for housing need far more precise.
Such an approach would also promote the return of SME’s to the market, a vital component of a diverse market, but one which as dwindled in the UK.