Urgent appeal to the incoming administration: Put an end to the housing conflict
In the UK, the housing market continues to struggle with a significant imbalance between supply and demand, leading to increased home affordability issues. A pro-growth agenda is essential to address this challenge, and the CEO of ASK, Daniel Austin, has proposed several key solutions.
Empowering SME Housebuilders
Austin believes that smaller developers can play a crucial role in increasing housing supply. He suggests encouraging SME housebuilders by allocating a proportion of local authority land in small plots, offering fully permissive planning permission for brownfield sites under 2.5 hectares, and providing government-backed equity schemes to strengthen SME balance sheets.
According to Austin, SME housebuilders used to build 40% of homes pre-2008 but now only contribute 15%, despite often facing less local opposition and being able to proceed with smaller, community-friendly developments.
Fixing the Planning System
Current delays in planning are the biggest barrier to increasing housing supply, creating uncertainty and high costs. Austin advocates for independent decision-making to remove political conflicts of interest that currently deter councils from pro-development actions. He also supports greater private sector involvement to reduce planning backlogs.
The aim is to reform planning as both a regulatory and economic imperative to unlock supply.
Addressing Labor Shortages
Post-Brexit shortages in construction labor, especially among small contractor teams, hamper delivery. Austin suggests driving productivity through off-site construction methods, which would also attract younger and more diverse talent, reduce build times, and lower costs.
Prioritizing Social Housing
Building on the government’s £39 billion investment in social and affordable housing, Austin stresses the need for clarity and decisive reforms to boost social housing delivery as part of the overall solution to housing affordability.
Promoting Brownfield Development
Fully permissive planning permission for smaller brownfield sites (up to 2.5 hectares) would unlock latent capacity for housing development by SMEs and help increase supply quicker.
Investors Recognize the Potential for Long-Term Capital Growth
Foreign investment is flowing into the UK real estate market due to the underservice in the housing market for the next five to 20 years. Investors recognize the potential for long-term capital growth in the UK housing market.
The Need for Action
The upcoming general election is centered around housing issues due to economic uncertainty. The current government's target of building 300,000 homes per year since 2004 has not been met once. It is crucial to incentivize developers to build on brownfield land and prioritize the use of existing buildings over new constructions.
A politics-free development sector may become a reality in the future, with reforms such as automatic granting of planning permission for sites with plans meeting minimum ESG requirements and local targets set to encourage councils to use their compulsory purchase powers. Lifting of boundaries on conversion projects should also be advocated for.
Compulsory purchase orders for land need further reform, including automatic conditions for authorities to exercise powers without paying hope value. Together, these proposals form a comprehensive approach aimed at reversing the decline in SME housebuilding, easing planning bottlenecks, tackling labor shortages, expanding social housing, and utilizing underused brownfield land to improve housing supply and affordability in the UK.
- In line with Austin's proposal, encouraging SME housebuilders through the allocation of local authority land, providing government-backed equity schemes, and offering fully permissive planning permission for small brownfield sites could bolster housing supply.
- Reforming the planning system by implementing independent decision-making, increasing private sector involvement, and prioritizing off-site construction methods could help address delays and labor shortages in the housing market.
