Home is not where the art is

Country Life Every Week - - Letters To The Editor -

THE Trea­sury is up to its old tricks. Faced with the crying need for more homes, the man­darins have dusted down the old speeches and in­sisted that the only an­swer is re­form­ing the plan­ning sys­tem and build­ing on the green belt, obliv­i­ous to the fact that they’ve tried that so­lu­tion sev­eral times be­fore and it’s never worked. Nonethe­less, once again, they and their col­leagues in the Depart­ment for Com­mu­ni­ties and Lo­cal Gov­ern­ment— the hous­ing depart­ment—have got the Sec­re­tary of State to re­peat what we’ve al­ready heard from all his re­cent pre­de­ces­sors. He’s go­ing to al­low sen­si­ble build­ing on the green belt wher­ever lo­cal coun­cils des­ig­nate al­ter­na­tive com­pen­satory ar­eas and he’ll also al­low them to re­draw the bound­aries if there are ob­vi­ous anom­alies.

Sounds per­fectly good un­til you look at the de­tail. The land they want to build on is of­ten the very piece that most pro­tects us from ur­ban sprawl and the so-called com­pen­sa­tion of­ten turns out to be a bit that was pretty safe from devel­op­ment any­way. As to anom­alies, these bits of un­de­vel­oped land may be cru­cial to stop­ping very much big­ger in­roads. Each ef­fort at tidy­ing up can lead to an­other anom­aly and an­other, un­til huge ar­eas have been built over.

I’m not, of course, sug­gest­ing that there are no pos­si­ble im­prove­ments in the plan­ning sys­tem. It’s sim­ply that any change is con­tro­ver­sial, it’s fought tooth and nail over and it’s mar­ginal in its ef­fect. The fun­da­men­tal is­sue is the hous­ing in­dus­try it­self. This is the most re­ac­tionary of sec­tors, re­main­ing sig­nif­i­cantly be­hind many Con­ti­nen­tal coun­tries and view­ing all in­no­va­tion with scep­ti­cism. Com­bine that with the un­doubted con­ser­vatism of the av­er­age home buyer and you have the recipe for hous­ing stag­na­tion, leav­ing us short of at least half a mil­lion homes.

House builders have got it very com­fort­ably summed up. Put up 110,000 houses a year, give or take 10%, and they get the best pos­si­ble re­turn on cap­i­tal. Nine com­pa­nies build the over­whelm­ing ma­jor­ity of new homes, so they’ve got things un­der con­trol—use the land sup­ply spar­ingly, hoard as much as you can and keep the prices ris­ing by never over-sup­ply­ing any area of the coun­try.

Be­cause they main­tain a com­pli­cated sup­ply chain, with sub-con­tract­ing at al­most ev­ery level, house builders have never had to make the re­forms that have been forced on other in­dus­tries. They build to stan­dard de­signs, but use on-site labour, get­ting the worst fea­tures of mass pro­duc­tion and those of be­spoke build­ing. It’s as if the ce­ramic in­dus­try made pots fol­low­ing a bog-stan­dard com­puter-gen­er­ated de­sign, but then con­tin­ued to throw them by hand. Nowhere would dis­rup­tive tech­nol­ogy be more valu­able. No in­dus­try needs an Uber or an Airbnb more.

How­ever, be­cause of its con­trol over the sup­ply of land, the in­dus­try can’t be eas­ily re­formed by mar­ket forces. That’s why the Gov­ern­ment has to step in. Min­is­ters have al­ready an­nounced di­rect fund­ing for fac­to­ry­built homes. It must now place the large-scale or­ders that alone will bring down the price of pre­fab­ri­cated houses. It must re­lease much more in­ner-city land and in­sist that it be built on within two years. In­deed, two years af­ter the grant of plan­ning per­mis­sion, any land still un­de­vel­oped should at­tract a monthly ‘plan­ning rent’. In ad­di­tion, much tougher en­ergy-sav­ing reg­u­la­tions would make new homes much more af­ford­able to run.

It re­ally is time that the Gov­ern­ment in­sisted that house builders ac­cept the nec­es­sary chal­lenges to dou­ble their out­put, em­brace new tech­nol­ogy, raise their en­vi­ron­men­tal stan­dards and stop blam­ing ev­ery­one else for our hous­ing fail­ure. That would then give them the right to call on Gov­ern­ment for help and en­cour­age­ment.

‘Nowhere would dis­rup­tive tech­nol­ogy be more valu­able. No in­dus­try needs an Uber or Airbnb more

Fol­low @agromenes on Twit­ter

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