Government Planning Reforms Could Cause Housing Supply Fall to Record Lows..

by Akeem Iginla

The Planning for Economic Failure recent report have stated that the Government’s anti-development approach to house building and warned that supply could reduce to the lowest level since the Second World war. The report insisted that the Conservative Government appeasement of its backbenchers, and the free rein given to various quangos will have devastating consequence on housing supply.

The report referenced the publicised Government reforms of the planning system that will see local authorities no longer required to plan for the housing needs of their communities and highlighted the growing list of interventions by Natural England that could see housing supply fall from 233 thousand last year to below 120 thousand homes per annum in the coming years well under half the Government’s frequently target of 300 thousand.

The projected fall have significant social and economic implications for the country and would deepen the housing crisis and the intergenerational inequalities and cost.

The increasingly anti-development and anti-business policy environment poses a real threat to house building and is inevitably at the forefront of minds when investment decisions are being made. The HBF executive chairman stated that “the Government’s capitulation to the NIMBY lobby and its mishandling of water and drainage legislation could see fewer homes being built than ever before. The social and economic implications are stark and threaten to widen the ever-growing intergenerational divide while costing hundreds of thousands of jobs”.

The research conducted by HBF shows that the changes to planning policy proposed by the Housing Secretary could result in a drop of 77,000 homes a year. Local Authorities are already adopting the anti-development reforms with 47 LPAs’ so far having halted their local plan making processes.

There have been 120,000 homes on hold as a result of Natural England’s moratorium on housebuilding in more than a quarter of the local authority areas. The problem had arose four years ago, following Natural England’s aggressive interpretation of an European Union Court of Justice ruling relating to nitrogen levels in Dutch waterways.

One of the Government quangos that had acknowledged that the vast majority of nitrate and phosphate pollution of waterways is as a result of agricultural practices and the long-term failure of water companies to upgrade wastewater treatment facilities is DEFRA. Natural England had however, acted exclusively against home building, by arguing that the occupants of new homes, through their use of showers and washing machines will endanger the health of rivers. This is even though the home building industry has paid an estimated £3 billion to water companies in the past 30 years in the form of ‘Infrastructure Charges’.

Natural England’s overzealous strategy to a range of other issues has also provided opportunities to block development in other areas around the country. For instance, regarding water neutrality, some parts of Sussex have become ‘No Development Zones’, due to water availability and concerns about the long-term prospects of an aquatic snail.

Regarding ‘Recreational Impact Zones’, Natural England had intervened to prevent new homes being built within 15km of beauty spots and national parks because of fears that residents of new homes may choose to walk dogs or go jogging in these areas.

In terms of Air Quality, Natural England is now consulting on plans to impose restrictions on development where new properties may lead to residents driving close to beauty spots and thus generating air pollution. This is despite all new homes built from2022 having Electric Vehicle charging points as a standard.

In 2012/13, England saw the lowest peacetime level of housing supply ever recorded. A series of policies introduced by a Coalition Government with a desire to build more homes to address decades of undersupply and boost the economy, led to a rapid increase in output such that by 2019, net supply in England had doubled, surpassing the highs seen during the housing booms of the 1950s and 1960s.

The increases in housing supply can be attributed to a range of factors, including the introduction of the National Planning Policy Framework (NPPF) in 2012, the Help to Buy Equity Loan Scheme, as well as a general positive attitude towards development that positioned the UK as an attractive location for investment in future supply, which allowed homebuilding to flourish.

However, in the recent period, a hostile political attitude towards building has driven a policy agenda that has on the whole, sought to restrict housing delivery.

The proposed changes to the planning system, and the free rein afforded to Natural England to impose new requirements on development are risking the progress in tackling the housing crisis made over the past decade. The combination of these factors has the potential to see net housing supply drop as low as 111,000 per year, around 10% lower than the previous the lowest ever annual net supply during peacetime.

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