Bacon Review identifies custom and self build as ‘missing market’ in housing

https://www.dropbox.com/s/kee6uk5zuzpb56g/Nacsba%20Press%20Release%20Bacon%20Revew.pdf?dl=0

The National Custom and Self Build Association (NaCSBA) expresses its deep gratitude to Richard Bacon for the energy, thought and passion that he has put into his Report. We are delighted by the Government’s “warm welcome”, and we look forward to seeing quality and diversity of homes that will flow from; this Report, Help to Build and the tightening of the Right to Build legislation. Most of all this reports helps show what can and will be delivered when we put those living in new homes have real choice over their design and specification, and how change can be delivered.

The review was personally commissioned by the Prime Minister in April this year*. His letter notes:
“The way in which our housebuilding market operates constrains the supply of new homes because there is not enough competition and innovation.

Unlike housing markets elsewhere in the world, there is a lack of consumer choice and diversity of supply.

“Self-build and custom housebuilding can play a crucial role in increasing choice for consumers and ensuring people can live in the homes that they want, and that are designed to meet their needs. We know that self and custom builders deliver high quality, well-designed homes that are energy efficient, accessible, affordable, and welcomed by their communities.”

The report is a key component of the government’s Custom and Self Build Action Plan, along with the Help to Build scheme and the review of the Right to Build legislation.

The Bacon Review recommendations

In his review Richard confirms the benefits of a customer-led approach to housebuilding, highlighting the choice available in all other countries and how that choice is delivered. New economic analysis by Chamberlain Walker Economics forms a substantial part of the report and identifies a missing market for customisable homes. Evidence from self builders themselves shows that they lead in the use of modern methods of construction and the adoption of greener technologies, and that very few would consider a home that is built speculatively rather than to their own design and specification.

As the Government itself states, our broken housing market is “a problem that won’t sort itself”, and Richard makes six key recommendations that we would urge the Government to implement in full, and at speed.

  1. Greater role for Homes England
  2. Raise awareness of the Right to Build
  3. Support community-led housing, diversity of supply and levelling up
  4. Promote greener homes and Increased use of advanced manufacturing
  5. Support custom and self build housebuilding through the planning reforms
  6. Iron out ant tax creases

Together, the recommendations set out a robust approach to brokering change, with land supply backed by Homes England activity at its heart. This includes the provision of pilot schemes and a destination Show Park of custom and self build housing to demonstrate the model and grow understanding. With the momentum that can flow from the delivery of the recommendations in this review, the sector will be well placed to scale up and provide the valuable additional housing – and housing choice – that government needs to fulfil its ambition of delivering 300,000 homes a year.

Housing Secretary Rt Hon Robert Jenrick MP said: “As we build back better, we want to help more people build their own home, making it an option for thousands who’ve not considered it or ruled it out before. This will help get more people on to the housing ladder, ensure homes suit people’s needs whilst providing an important boost to small builders and businesses too.

“I warmly welcome Richard Bacon’s report which matches our ambitions for the custom and self-build sector. We will consider it fully and respond to the recommendations in due course.

“The launch of the Help to Build equity loan scheme will be a game-changer to the self and custom build market and will allow individuals to borrow with lower deposit mortgages which will go towards the design and build of their new home.”

Mr Bacon said: “At no other time in our history would new housing be thought of as a form of pollution, creating a monoculture to be resisted from villages to towns. The central problem is that most customers have almost no clout when it comes to buying a home. There is a “missing market”. Instead of customers who are able to choose for themselves what they actually want, which of course will vary hugely – just as people vary hugely in their tastes, preferences and lifestyle choices – in practice most customers have very little say. Indeed, for the very item on which customers spend the largest proportion of their incomes – their homes – they hold the least consumer power.”

“Those who have managed to step outside this prevailing framework and commission or build their own dwelling see a result that is to their own taste – greener, better built and more welcomed by local communities. And while thousands of people have succeeded in doing this – often with the help of NaCSBA members – it is still difficult to do, whereas it needs to become normal. Indeed, it should be no more difficult than ordering a new car.”

“There is a solution. It involves creating the conditions in which customers are treated as if they matter the most, rather than – for the most part – scarcely mattering at all. And this is what happens when people themselves commission the houses they would like to see. Homes England, whose remit includes making markets, has a key role to play in kickstarting this market including providing land and investment and helping to streamline planning – and my core recommendation is that a Custom & Self-Build Delivery Unit should be established with a mandate to deliver the required changes, staffed by skilled professionals with deep experience of delivering custom and self-build projects for customers across all tenures.”

Andrew Baddeley-Chappell, NaCSBA CEO said: “There is clearly something wrong with any market where customer choice is so notably absent, in particularly where such choice so demonstrably leads to better and greener homes. At the heart of the challenge is a planning system that appears hard wired to produce a product that most of us do not want, and which fails to reflect the diversity of our communities.

“Yet there is a proven viable solution. One that works everywhere else in the world, the question is not whether change is needed but how that change happens. To make that change we must ensure that sufficient land comes forward on which people can chose the home they want to live in. We must also open the eyes of the public to the possibilities that are out there. Both these aspects require the leadership of Government to address the failures in our current market.

“The recommendations in this report, which include the review of the Right to Build and the rapid launch of Help to Build have the capacity to positively transform our country’s relationship with the new homes market.

OTHER ELEMENTS OF THE GOVERNMENT’S ACTION PLAN:

Help to Build Equity Loan Scheme

Robert Jenrick announced the Help to Build fund earlier this year, with £150 million of initial funding to help more people afford to build their own homes. This gives access to the market for those who are constrained by a smaller deposit, while demonstrating the confidence that Government has that the scheme will deliver more and better homes. This helps redress the balance with Help to Buy, which was not available on most custom and self build homes. NaCSBA hopes the scheme will be available to applicants by the last quarter of the year.

Legislation review

A detailed review of the existing Right to Build legislation is underway, based on its effectiveness to date. NaCSBA expects this to address the discrepancies between the intention of the legislation to help more people custom and self build and the reality of local authority practice. This should contribute to improved processes, together with clearer expectations about the tests local authorities can apply to the registers, and the ways in which they monitor activity.

Additional measures

The Action Plan also included a One Public Estate fund to support more land in public ownership to come forwards for custom and self build, and funding from the Ministry of Housing, Communities and Local Government for the Right to Build Task Force to enable it to deliver training to councils.

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Duncan Hayes