Patrick Mooney, housing consultant and news editor of Housing, Management & Maintenance asks, do the Government’s numbers for how many homes with planning permission have not been built stack up?
There is a strange and mysterious coincidence about housing statistics sometimes, and one of those occasions occurred recently, when the reported number of unbuilt homes with planning permission almost exactly matched the number of households on local authority waiting lists.
In making a pitch to the Government for additional powers and resources, the Local Government Association revealed that since 2010/11 English councils have granted planning permission for 2.78 million new homes. But over the same 10-year period only 1.6 million homes had been built, creating a shortfall of 1.18 million homes.
A month earlier, the Ministry of Housing released its latest figures for social housing lettings in the previous year. Among the mass of statistics included in its press release, was one informing us that there were 1.15 million households on local authority waiting lists on 31 March 2020, which represented a one per cent decrease on the previous year.
The closeness of the 1.18 million and the 1.15 million figures should not fool us though – the waiting list for a council house would not be wiped out simply by building all of the homes with planning permission.
Not only are they located in different places across the country, but they also do not match up in terms of size, housing type, price or affordability. Even if we wanted to make the waiting list disappear, it could not be achieved by ‘nationalising’ the pipeline of unbuilt homes with planning permission. Life is not that simple!
AN ANNUAL CONTEST
The LGA produces figures every year showing how many homes remain to be built, despite being granted planning permission. And, every year the volume housebuilders cry ‘foul’ in return, claiming that they are not sitting on a vast land bank, and that bureaucratic planning rules and regulations need to be overhauled if they are ever to build sufficient new homes to meet the nation’s needs. This year was no different.
As part of its lobbying of Government ahead of the Queen’s Speech, the LGA argued that local councils should be helped to build at least 100,000 new homes a year and that councils should also be able to charge developers the full council tax charge for every unbuilt house when the original planning permission expires.
The LGA also wants the Government to make it easier for councils to use compulsory purchase powers to acquire stalled housing sites or sites where developers do not build out to timescales contractually agreed with a local planning authority. This was the equivalent of the LGA putting their tanks on the housebuilders’ pristine, manicured lawns.
In response, the Home Builders Federation denied that developers were sitting on land unnecessarily. Andrew Whitaker, its planning director, said: “While housing supply has doubled in recent years, the planning process remains the biggest constraint on further increases.
“Many of the homes included in the (LGA) numbers will have actually been completed or are on sites where construction work is ongoing. Others will only have an initial consent and be struggling their way through the treacle of the local authority planning departments to get to the point where builders are allowed start work.”
BOLD ACTIONS REQUIRED
As we can see, the HBF returned fire on the LGA, and we are no nearer to achieving the Government’s target of 300,000 new homes being built every year. Although in fairness to the HBF’s members, it is only right to point out that builders have increased housebuilding rates in recent years, with completions reaching 210,600 in 2019/20, its highest level in the past 10 years.
But for the country to somehow generate another 90,000 new home completions in the coming years to reach the magical figure of 300,000, the LGA believes that councils need to be empowered to increase their output.
Councillor David Renard, the LGA’s housing spokesperson said: “Councils are committed to working with Government and developers to build the housing the country needs.
“It is good the number of homes built each year is increasing. But by giving councils the right powers to incentivise developers to get building once planning permission has been granted, we can go further and faster. Councils are granting permission for hundreds of thousands of homes but families who desperately need housing cannot live in a planning permission.”
Councils are in many instances desperate to increase their own housing stock and reverse the trends of the past decade where as a result of Right to Buy sales and transfers to housing associations, their total stock of housing has fallen by 11 per cent to 1.58 million properties in 2019/20.
In contrast, housing associations have increased their stock numbers by 18 per cent during the same period to 2.58 million in 2019/20. In total, since 2008 the social housing stock has been increasing each year and now stands at 4.17 million houses and flats.
But because people are staying in their council or HA home for longer periods (they have more secure tenancies than private rentals as well as lower rents), fewer of these low-cost homes are becoming available each year and this is putting greater stress on the waiting lists and extending the time it takes to provide homes to those in need.
NOT A NUMBERS GAME
There were only 306,000 new social housing lettings in 2019/20, a decrease of 2.5 per cent on the previous year and a whopping 23 per cent fall from the peak of 396,000 new social housing lettings in 2013/14. This is forcing councils to turn increasingly to the private rented sector for solutions to the chronic under-supply of affordable housing. However, it is usually a less popular option because the standard of accommodation available at lower, affordable prices is variable at best and unsafe at its worst.
It is estimated that up to 400,000 tenants have racked up huge rent arrears during the past year as a result of strained incomes during the various lockdowns and many thousands of tenants are at high risk of being evicted.
The ban on evictions was extended several times during the Coronavirus pandemic, but it ended on 31 May, and it is feared that tens of thousands of tenants (maybe even hundreds of thousands) will be evicted. Many of them will then apply to join the council waiting list, pushing the combined lists well above the 1.15 million figure.
Giving approval to councils to build thousands more low-cost homes now will not create an overnight solution to the impending evictions crisis. But the Government could make help available through discretionary payments for those tenants in arrears, deferring the need for landlords to repossess their properties.
Proactive help to ward off huge numbers of evictions would save the Treasury a small fortune in paying for bed & breakfast, and it could also be seen as a better investment than the more than a billion pounds spent on the stamp duty holiday extended to home buyers in recent months.
This is actually a much more important social and economic issue than the ongoing tit-for-tat between the LGA and the HBF. Let’s hope that Ministers make the right calls, but looking forward it would not harm to respond positively to some of the LGA’s requests and give councils the tools to build 90,000 new homes a year, so they can bridge the gap between current targets and levels of supply. Surely that would be a win-win and satisfy both the LGA and the HBF.