‘We hope to buy the first one and then object to the other 199 being built’

Big developers who hoard land and delay construction must be fined while small firms must be encouraged

HOMES will be built over railway lines as part of plans to solve the housing crisis, The Daily Telegraph can disclose.

Sajid Javid, the Housing Secretary, wants to replicate schemes in other countries where builders are granted so-called “air rights” to build above transport hubs and other utility sites.

The news came as the Prime Minister said failing high streets should be turned into residential housing. As she set out her plan for a “national effort” to build more homes, Theresa May said the rise of online shopping meant “retailing is changing”, and empty shops should be turned into homes.

The Government wants to shake up the planning system to boost the number of new homes being built, while protecting small towns and villages.

In cities, the Housing Secretary plans to allow people to build upwards as long as their neighbours agree, and a consultation document sets out how homes could be built over railway stations and Underground lines.

The document, published yesterday, “recognises the importance of making the most of existing spaces, making clear that plans should seek more intensive use of existing land and buildings and include minimum density standards in town and city centres and around transport hubs”.

A report by engineering firm WSP, published last year, revealed there could be enough space for 250,000 new homes in London alone if railway lines were boarded over and built on. This represents around 10 per cent of rail space in the capital and would have no impact on the running of trains. Bill Price, the WSP director, said: “We have to be more creative in using existing space in what remains a relatively lowrise city. The air rights above rail tracks present an unrealised but significant opportunity to build more new homes on brownfield land. It’s important to emphasise the engineering is absolutely possible and not new.”

Asked why she had previously blocked developments in her constituency, Mrs May said her goal was to get “the right homes in the right places”. She added: “Yes, I have opposed a number of developments in my own constituency. I have also… supported a development … on a green-belt site which had previously been built on.”

The Prime Minister announced extra protections for the Green Belt and warned councils found to be dragging their feet over building new homes that action would be taken.

Her plans were criticised by Lord Porter, the Tory chairman of the Local Government Association, who said councils should be given greater freedom to borrow to build homes.

Lord Porter said it was “completely wrong” to blame councils for failures to build and said it was “unhelpful and misguided” to threaten to strip authorities of their rights to decide where homes are built, as Mr Javid had done.

‘The air rights above rail tracks present an unrealised but significant opportunity to build more new homes’

Housing is the Government’s most pressing domestic issue. About three million too few homes have been built in the past 30 years. Relentless demand, in the face of inadequate supply, has seen prices spiral upward, preventing countless young adults from buying. Millions of hard-working people – even welleducated professionals, who should be natural Tory voters – cannot fulfill this basic ambition. Yesterday, Theresa May gave the first indication that she might be serious about solving this national emergency.

Average house prices across the UK are now eight times the average wage, a historically high multiple, impossible to finance with a regular mortgage. Half of first-time buyers depend on “the bank of mum and dad”, rising to two-thirds in London and the South East. This stark reality has fuelled resentment among millions of “priced-out” 25 to 45-year-olds without wealthy parents. Nothing does more to explain why Jeremy Corbyn, during the June 2017 election, came within a whisker of Downing Street.

The Prime Minister has so far responded by continuing the approach of her nemesis, former Chancellor George Osborne, pumping tens of billions of pounds into Help to Buy. Applying only to new-builds, this has been a cash bonanza for the large developers that dominate our housebuilding industry – helping them to offload a slew of small, low-quality homes, often racked with faults and on punitive leaseholds.

Rather than injecting more taxpayer money into a severely imbalanced market, the Government should take drastic steps to ensure more homes are built. That means understanding why house building has fallen so short – averaging just 150,000 a year since the 2008 financial crisis, rather than the 250,000 needed. The house-building industry blames Nimbys who oppose development. Mrs May herself yesterday admitted to “opposing a number of developments in my own constituency”.

Yet the bitter reality is that while in recent years local authorities have granted much more planning permission, the private sector has failed to deliver. Internal government figures show that, since 2009, the number of planning permissions outstanding has more than doubled. Over the same period, the number of houses coming to market each year has risen by just 16 per cent.

Planning permission has been granted on about 800,000 unbuilt homes in England alone, almost 60 per cent up on 2012. The Government can engage in a huge row about shifting parts of the greenbelt or the morality of Nimbyism – but it would be far better if the housing-building industry simply made good on the planning permissions already granted.

Lowering supply boosts prices, meaning house-builders have what Mrs May yesterday called a “perverse incentive” to hoard land once it has been approved for development rather than build on it. Taking on the Treasury, 18 months ago Communities Secretary Sajid Javid accused the large house builders of “having a stranglehold on the market” – but his calls for radical reforms were rebuffed. Now, the Prime Minister finally seems to be listening. Companies could be denied planning permissions in the future, she said, if they “just sit on land and watch its value rise”.

When we last built 250,000 houses a year back in the Eighties, two-thirds were supplied by small- and mediumsized firms. The industry now “shows all the characteristics of an oligopoly”, according to a House of Lords report, dominated by a few mega-builders able deliberately to restrict the pace at which homes come to the market, artificially boosting prices and their profits.

Almost 40 per cent of residential planning permissions granted across the UK now lapse. Delays between planning permission being granted and homes appearing have doubled over the past four years. Mrs May calls for the big developers to “do their duty and build the homes our country needs” – but this is jingoistic nonsense. These firms’ legal obligation is to maximise profits within the framework of the law.

Until big developers are fined for undue delays, and some land is reserved specifically for small firms, nothing will change. Mrs May is finally talking tough. Now she needs to deliver.