29 January 2019 | OPINION
Housing is paramount to the well-being of our society and it is vital that the country meets its 300,000-per-year target for new homes. Effective housing supply is essential in ensuring that citizens can live independent and healthier lives. Our economic growth is absolutely dependent on the building of new and better homes.
Whilst some industry leaders believed this target to be over ambitious, there is scope for these targets to be met providing both the public and private sectors take advantage of the opportunities in the housing market. It is clear that both local authorities and the private sector can use their leadership and expertise to deliver the housing Britain needs. From Council’s taking leadership in their communities by providing strategic clarity around housing need, growth and opportunity in the area, to businesses working with them to ensure innovative finance arrangements, there are exciting opportunities in the housing market to build new homes and help people across the country realise their ambitions of owning their own homes.
It has been argued that Britain’s local authorities have in the past been guilty of failing to take a ‘hands on’ approach to house building. Councils have usually been responsible for purely assessing housing needs and determining planning permissions. The result of this has been a lack of leadership and coherency in housing delivery. The Elphicke-House report in 2015 found that construction businesses had on average between 300 and 400 meetings with councils, just to secure a single transaction. This is indicative that local authorities are failing to build long-term and efficient relationships with the private sector. In order for Councils to become housing delivery enablers, they must foster and take advantage of close partnerships with housing associations, developers and finance partners.
The first way in which Councils can take a more pivotal role is by viewing housing development as an investment. Council’s should demonstrate to potential investors that they are open for business. In so doing, they will develop a more productive relationship and be better positioned to stimulate housing projects. For example, it would allow Councils to borrow money more cheaply and invest it in local house building, either directly or through third parties. Councils can also provide land and defer land payment until a sale is made. In addition, they can invest the land proceeds as equity and share in the land profits over time.
Councils must work with the private sector to deliver housing by actively encouraging innovation and greater business opportunities. For example, Council’s should work more closely with smaller businesses and independent builders. The housebuilding industry is dominated by 10 major construction companies. The National House Building Council found evidence that these 10 companies would not be able to deliver on the government’s yearly target of 200,000 homes. Council’s should recognise this and work closely with smaller businesses and support them to access the finances and skills they need to help deliver on the housing target. This will not only ensure that housing targets are met, but will also stimulate economic growth by supporting local businesses in the area. Helping small businesses to compete with the major house builders will allow Council’s to unleash additional ways to build homes, as well as new and innovative building methods that local businesses can offer.
Finally, the government can play a role in facilitating greater communication between the public and private sectors in delivering more for housing. For example, in London greater devolution to Boroughs rather than to City Hall will have two positive effects. Firstly, it will allow Boroughs to specifically pin-point housing requirements for a particular area. It will also give Boroughs the freedom to work with different investors and private partners more efficiently and target their residents’ needs.
Britain must deliver on its housing promise in order to ensure there are enough homes to continue to solve the housing crisis. The Labour leadership have said that it is local authorities and not the private sector that should lead on house building, often criticising Mrs May’s government for not giving authorities the money to do so.
However, this is approach driven by ideology rather and will only serve to put further pressure on local authorities. The most progressive way to achieve a step change in housebuilding is through a partnership between the public and private sectors. The opportunities that are presented by working together are numerous, and include greater speed in housing delivery and the growth of local business opportunities. To this end, private and public sectors can work together to create a innovate culture of house building in Britain.
Jimmy Coles is Opinion Editor and Founder at Wolves of Westminster and a political consultant. Follow him on Twitter @JimmyJColes
