Hiten Ganatra: Boosting housing supply to help Generation Rent become Generation Buy

1 Jun

Hiten Ganatra is Managing Director of Visionary Finance.

The Government’s commitment towards the levelling up agenda was reinforced by the Chancellor in his recent budget announcement, delivering on its Manifesto pledge to help generation rent become generation buy with the introduction of the government-backed mortgage guarantee scheme.

Whilst this was a welcome policy to complement the Help to Buy scheme, aimed at opening up the supply of the second-hand housing market and reducing reliance on the new build sector, there is more to do on the supply side. Forecast estimates 345,000 new homes per year to meet the backlog and future demand against net new dwellings running at just over 200,000.

Addressing the supply side issues

A recent report by Dr Gerard Lyons for the Policy Exchange identifies four key interventions to help boost the supply of housing. While these recommendations are likely to have a positive impact on supply side, thought must be given to what needs to be done to achieve the required growth in housing numbers of 100,000 per year. First, the availability of skilled tradesman will be a key factor and while there are many construction-related apprenticeship and training programmes available the uptake of these courses is dwindling, with the Federation of Master Builders reporting apprentice numbers in the construction sector falling.

The Construction Industry Training Board reckons that the sector needs to recruit and train 31,600 workers every year to keep up with the demand. A shortage of skilled workers has been exacerbated by foreign born workers returning home not only because of the end of the transition period but also as a result of the pandemic.

A thriving construction workforce will be key to delivering the housing numbers to keep pace with the level of demand and therefore the Government must do everything within its powers to develop the next generation of homegrown tradesmen but also to attract migrant talent for the sector.

Second, the planned root and branch reforms of the current planning system must be implemented. In every planning application narrow interests will be prevalent. They may come in the form of developers overdeveloping sites to maximise profits, while giving little consideration to local infrastructure or affordable housing mix.

Equally, local councillors or MPs might withhold their support for developments for fear that they may not be re-elected or local residents objecting to schemes due to NIMBYism. Absolute control of the planning process needs to taken away from local authorities and be replaced by something like a regional housing delivery taskforce which would look to consider each major planning application based on pragmatic views with emotions and vested interests withdrawn. As a former Conservative councillor I saw first-hand many obstacles with the current local authority planning system.

Third, we need to be introducing a framework to encourage smaller developers and to make funding more accessible and cost effective. Borrowing rates for small developers to fund projects are significantly more expensive than for larger house builders. Currently development funding is available to smaller developers at rates between six and 12 per cent per annum with prohibitive arrangement and exit fees which can be as high as two per cent each way.

Another consideration for smaller developers is the capital they are required to inject which could be as much as 40 per cent of the land cost and 40 per cent of development cost. Hence, for example, on a scheme which has a gross development value of £3 million where the developer has purchased the land for £1.2 million and anticipates a build cost of £1 million a cash amount of approx. £880,000 would be required which would price many small developers out of the market.

Mortgage Guarantee Scheme – a game changer

Since the pandemic, the availability of high loan-to-value (LTV) mortgages has contracted significantly with lenders becoming nervous around the long term economic impact. In September 2020 I had conversations with many lenders about where they expected the housing market to be in six to 12 months time and almost everyone predicted that house prices would fall between seven to 14 per cent. Lenders therefore withdrew completely from 90 per cent LTV mortgages last year and have only recently re-introduced high LTV products.

The announcement of the government-backed mortgage guarantee scheme will help to unlock a wider pool of housing stock for first time buyers in areas that have been left behind. The £5 billion commitment to the Levelling Up Fund will not only help to re-invigorate local towns and communities but, with this scheme, make possible the aspiration of home ownership more achievable.

If we take Wolverhampton as an example, a town which will benefit from the investment, the average price of a house is £179,206. Under the current mortgage options available this would require a minimum deposit of £17,920 (excluding costs).

To illustrate the financial impact for a would-be first-time buyer the following table shows how, with a larger deposit, mortgage rates begin to fall drastically. This has a notable effect on the monthly payment but also the size of the deposit required.

The difference in monthly payment between a 90 per cent LTV product and 80 per cent LTV product is just over £165 per month and the deposit required is an additional £17,920 which makes the aspiration of homeownership out of reach for many.

The recently announced mortgage guarantee scheme by the Government has seen an increase in the availability of 95 per cent LTV products both from lenders who have signed up to the scheme and from those who have opted to offer the higher LTV products independently. Rates on the mortgage guarantee scheme are starting from 3.73 per cent p.a which means using the above illustration monthly payments would increase to £872.61. Whilst the deposit level would drop to as low as £8,960 the circa 90bps which lenders are having to pay the Government to be part of the scheme could mean the success of the initiative may end up underwhelming particularly if cost of homeownership is higher than local market rents – which in Wolverhampton currently stands at £824 pcm for a three-bed home.

Stamp Duty Land Tax (SDLT) – what should happen to this inefficient tax

Although a short-term extension was announced on SDLT, this tax is a blunt money raising tool for the Government and is ripe for reform, as it doesn’t help those who most need support. For example, first time buyers who save up for the deposit would need to save up additional funds beyond the deposit to cover SDLT as it can’t be added to the mortgage.

If the volume of property transactions decline this invariably means less SDLT receipts for the exchequer. The revenue only feeds off the tax receipts of SDLT if the market is buoyant. Given that we are facing a period of economic uncertainty, it is important the Government looks at the bigger picture of economic growth which invariably will generate greater tax receipts over a sustainable longer term.

Therefore, I propose we scrap SDLT entirely and look to replace this with some form of residential property sales tax, , where the seller pays a percentage from the equity they have built. Critics of this would say that the tax would be passed onto buyers however with many buyers reliant upon a mortgage to support the purchase the valuation of the property would need to remain affordable.

Through joined up thinking the Government can absolutely achieve the objectives it has set out to expand home ownership and increase the supply of homes. This will require further bold, creative and decisive measures, to deliver on its commitment of levelling up the UK.

Mario Laghos: More support, less regulation – how Government can help British industry thrive

23 Jan

Mario Laghos is a political analyst and the editor of Just Debate.

So many of our countryside towns, which are home to historic churches, school buildings and libraries, are increasingly blighted by the emergence of fresh-faced red brick town houses.

They buffet the existing architecture in the most jarring way, even though not too dissimilar in aesthetic quality to the sort of brown Soviet-style flats that were built in the 1970’s and 1980’s to facilitate those same town’s growing populations. Iconic villages are being swamped by the apathetic copy and pasting of dwellings whose one and only reason for existing is the cheapness involved in their construction.

In most if not all cases, however, these villages are sited next to quarries, from whence the original buildings’ constituent stone is derived. Yet those quarries sit dormant, even while so many of our youth suffer the indignity of precarious employment, or flee to cities for opportunity.

These sites could give meaningful work to the young whilst ensuring our historic towns are conserved by using local resources, local labour and local style. Why not honour our past, and capture its spirit for our future, by re-opening them?

Well, primarily because of cost, of course. It isn’t economical, prima facie. The steel we use for construction, and the coal required to forge it, are imported in such huge volumes – and from China no less – despite the fact that we sit atop a mountain of coal and are a nation home to some of the best steel workers in the world.

Our steel industry is essential to the defence of the realm. Much of our coal wealth sits beneath some of our most destitute regions. Yet we refuse to extract it for fear of emitting carbon. Far easier to have a freight ship carry it across the world, so as to keep the CO2 off of our books. After all, the cost of having to beautify the mine after it has been exhausted, erecting solar farms to offset emissions, and cutting all the red tape would no doubt be a costly and time-consuming affair.

Thus towns which were once the engines of the nation are resigned to destitution and sink into terminal decline, buoyed only by call centres, coffee houses, and betting shops.

In 1998, we imported 20 per cent of our energy. Today that figure stands at 40 per cent. We rely on Russia for the bulk of our solid fuel and much of our petroleum. Yet while many could be given high-skilled work and boundless opportunity by extracting energy via fracking, a technique which has made the US a net exporter of energy, we have placed a moratorium on it.

Worse, we are an island nation who continually fail to make good on our geographic gift; that we are surrounded by water. We are constantly told that we are set to become the Saudi Arabia of wind, but why not of tidal power, too?

We have become so infatuated with financial services and the City of London, we have lost sight of our nation’s traditions and its strengths. Thanks to the market economy we have become acutely aware of the price of everything: we know goods and materials from poor countries with inadequate labour laws are cheaper than those produced onshore. The start-up costs associated with brickmaking factories or quarries can be prohibitive – far better to buy them in then, and let balance of payments deficit grow further still.

The list goes on. We have found it convenient to be energy-dependent, particularly as self-sufficiency often necessitates government subsidies, a most unattractive proposition. And there is little profit in being readily prepared around the clock for a once-in-a-century medical crisis, as the state of our PPE warehouses attests.

But we must become more attuned to the virtue of value, rather than the seductive mistress of price. Rather than sending young people into the doldrum of recruitment agencies which recruit for recruitment agencies like Russian dolls, meaningful employment and national value can be found in traditional industry, and the kickstart costs incurred by the helping hand of governance will be paid back. High-wage taxpaying workers, the value added of energy self-sufficiency, the control of our destiny, and the improved social relations and reduced crime wrought by stable work and increased home ownership will pay back and more that which would be required to jumpstart dormant industries.

Of course, such work is not limited to simple labour, but will require the efforts of highly skilled engineers, architects and technicians, and administrators.

This rediscovery of the virtue of industry and meaningful work does not mean abandoning Conservative values. It should go hand-in-hand with a ferocious effort to cut the pointless regulation which holds back investment and development. Rishi Sunak’s task force should be just the start.

The UK is a leader in the global race to administer vaccines. But we could improve our lead, and once we finish in poll position could turn our resources over to benefit of the world.

But our programme, excellent though it is, was late off the blocks, its momentum partially scuppered by (now-scrapped) regulation which required vaccine givers to have completed 21 documents, including courses to combat terrorism and have adequate knowledge of human rights. It failed to move into fifth gear fast enough due to an evident reticence to involve the military. And it is set to be dealt a further blow still by our lack of onshore manufacturing capability, as Pfizer’s Belgium plant is having to ration its output.

Much like our dithering on extracting British coal, which has held up approval of a singular Cumbrian coal mine for years, and as with the moratorium on fracking, despite our willingness to import natural gas, it is another instance of tedious regulations which serve only to straightjacket Britain from fulfilling its potential – all while exacerbating the harms they are designed to mitigate.

It is time to throw a one-two punch. Market forces must no longer be allowed to hollow out towns, cities and villages with race-to-the-bottom-on-cost housing. Nor should they relegate to a footnote of history proud and noble industries with strategic value in favour of financial services and the City of London. And to achieve these ends the government must become adept in knowing when to step up and offer needed support, and when to step stand back by consigning counterproductive regulation to the dustbin.

Kirsty Finlayson: The Government is making good progress on green issues, but there is much more to be done

4 Jan

Kirsty Finlayson is Director of Communications for the British Conservation Alliance, which launches today. She is a solicitor and has previously stood as a Conservative candidate in the 2017 General Election and the 2019 European Election.

My first school, in rural North Nottinghamshire, had a beaver as its mascot. Despite understanding the symbolism – valuing hard work and aspiring to be “as busy as a beaver” – my four-year-old self was perplexed at never having seen the rodent, despite living on the River Trent.

Nevertheless, living in the countryside close to Robin Hood’s Sherwood Forest inspired a lifelong love of nature. Studies have shown that a child who experiences nature before the age of 12 years old is more likely to be motivated to protect the environment in adulthood.

Yet over 90 per cent of the UK population will be city dwellers over the next decade.

With Brexit being the focus in 2019, the word “wildlife” was mentioned just once in our Party’s Manifesto. There were, however, several encouraging commitments to conservation, including pledges to tackle deforestation, introduce a new £500 million maritime preservation programme, ensure farmers farm in a way that protects and enhances our natural environment, plant an additional 75,000 acres of trees a year by the end of the next Parliament, and create new National Parks and Areas of Outstanding Natural Beauty.

The Environment Bill reintroduced in January 2020 has helped re-establish conservation as a Conservative cause. It introduced a mandatory requirement for “biodiversity net gain” during planning, an essential addition to planning rules, given the “requirement” for 300,000 new homes each year.

The Bill went some way to improving long-term conservation with the creation of “conservation covenants”, which allow a landowner and “responsible body” (such as a conservation charity or public body) to fulfil conservation objectives. In the past, conservation obligations were only personal agreements which failed to bind successors in title; conservation bodies had to acquire the freehold of land to secure long term conservation. Now, conservation covenants – as legal commitments – can ensure more permanent preservation of our previous wildlife.

The Bill also introduced a “Duty to Consult”, giving the public an opportunity to understand why an urban tree is being felled and to express their concerns, whilst also strengthening the Forestry Commission’s power to clamp down on illegal tree felling across England – which will be welcomed by right and left wing tree huggers alike.

The improvements in air quality that are brought about by more vegetation are clear; but if Covid-19 has taught us anything, it is that the benefit of outdoor greenery is not just precious, it is crucial; trees not only help clean and cool the air, but improve people’s mental and physical health too.

A recent National Trust survey revealed that 80 per cent of the happiest people in the UK have a strong connection with the natural world, compared with less than 40 per cent of the unhappiest. The opportunity to enjoy nature can no longer be a luxury enjoyed by privileged garden owners. A pandemic poll by the RSPB showed that 84 per cent of people in England support the suggestion that the Government should increase the number of accessible nature-rich areas in the UK as part of our pandemic recovery. Links to nature are also associated with far-reaching positive effects on the brain. Studies have shown that a window with a view of green space can reduce the crime rate by as much as 50 per cent.

Returning to the busy beaver, the water flow control that natural habitats provide is essential for our flood defences. With the number of extreme wet days in the UK increasing and costing the UK economy around £2.2 billion a year and causing stress and hardship for homeowners, as well as unprecedented challenges for businesses, councils and the insurance industry, the beaver is just one example of a self-sufficient water management resource.

In 2015, beavers were reintroduced to the countryside in Devon; the Devon Wildlife Trust found that the beavers’ effects on the surrounding area was profound. They not only reduced flooding through dam-building, but they caused plant life to flourish (boosting other types of wildlife), held water in dry periods which prevented sediment and inorganic fertilisers from being washed from farmland, and even reduced erosion and improved water quality. Since 2017, 13 beaver licenses have been issued by the Natural England, most recently to the rewilding project at Knepp in Sussex.

Despite the positives to be drawn by the Environment Bill, however, there is still so much more that individual local activists and large lobbying groups can campaign on.

The Government has set out how developers should protect much-loved British wildlife, but we must do the same on agricultural land, encouraging areas of re-wilding which have a positive impact on both land use and surrounding nature. This does not need to come at the expense of farmers and their livelihoods.

There are huge opportunities to rethink how farmland is managed with the overhaul of the Common Agricultural Policy. Farmers currently benefit from subsidies such as Agricultural Property Relief. Whilst conservation covenants are a start, why not give farmers a tax benefit for re-wilding? Let’s give businesses economic incentives for wilding land, which can provide long-term public benefit through physical activity and education. Brexit has afforded us the opportunity to view farming and conservation as mutually compatible; improving the quality of our land, which includes reversing land degradation, will also boost our nation’s food production in the long term.

Post-Brexit, we must take the lead in environmental legislation; previously, it took EU subsidies to change soil quality. With a relatively small land mass, we cannot afford to be complacent. The Government has supported the ban on pesticides to protect bee pollination, but has yet to oppose the herbicide glyphosate. Some local authorities such as in North Somerset, Bristol, and Lewes have decided not to wait for Government intervention, and have already imposed restrictions on the herbicide, which various studies have labelled as having serious health implications.

And we must not ignore international cooperation in the wake of Covid-19. Whilst the UK government has implemented a far-reaching furlough scheme, many of the world’s inhabitants do not have such government support, leaving them vulnerable to exploit natural resources (primarily precious forests and oceans) to survive. In the Global South, this is likely to have a devastating long-term impact on the natural world. The Prime Minister’s commitment to cooperate internationally in order to introduce wildlife corridors, cut deforestation and protect 30 per cent of the world’s oceans will be welcome.

Bob Seely: The Government must urgently re-assess its misguided housebuilding strategy

11 Sep

Bob Seely is the MP for the Isle of Wight.

Across rural shires and southern England, the Government is set to impose unachievable and damaging house-building targets which will undermine the levelling up agenda.

Environmentally, they will heap pressure on shires, whose infrastructure is already under strain. Economically, they will reinforce jobs and growth in the South when we have promised to level up the North. Politically, they will prove deeply unpopular.

This latest piece of self-induced, foot-shooting has come in the form of the new Standard Method for house-building. It accompanies the Government’s White Paper on housing, Planning for the Future. Whilst the White Paper itself will face debate and potential amendments, the new Standard Method can apparently simply be adopted. It will damage this Government.

MPs and councillors across Britain are slowly waking up to this. Ministers belatedly claim to be listening; they need to.

If ‘levelling up’ means anything, it means an integrated Government plan to support infrastructure, job creation and house building to revive the Midlands and North, especially towns overlooked in recent decades, and to stop the endless drift of jobs and people to the South. Yet this housing  strategy, as Neil O’Brien has outlined in his well-researched article, results in much lower targets in Northern cities, where we should be kickstarting revival, and significantly higher targets in rural and suburban areas.

This disjointed policy demands significant greenfield development. I know not a single Tory voter in the last election who voted for this. If this is an example of co-ordinated Government, it is a well disguised one.

The 12 biggest absolute decreases in housing targets by local planning authority on 2018/19 delivery are generally Labour controlled Midlands and northern cities and towns, with few exceptions: Salford (-59 per cent, -1882 dwellings per annum (dpa)), Birmingham (-27 per cent, -1131 dpa), Liverpool (-48 per cent, -1063 dpa), Leeds (-30 per cent, -1040 dpa), Southampton (-48 per cent, -784 dpa), Newcastle upon Tyne (-56 per cent, -978 dpa), Manchester (-30 per cent, -699 dpa), and Nottingham (-38 per cent, -559 dpa).

Instead, rural and suburban England is going to be hit. This will alienate both millions of Conservative voters and thousands of Conservative Councillors. Moreover, the withdrawal of powers from local Government suggested in the White Paper will undermine local democracy and the important role of councillors.

Council colleagues should know the following local planning authorities will all be required to more than double their 2018/19 delivery rate. This is likely to result in a tsunami of local anger from those who believed they could trust a Conservative Government not to concrete the countryside. It will fire up our political opponents and may suppress our support in future elections, beginning next May. Here is a modest selection, with hyperlinks:

Arun in Sussex (+239 per cent, +1454 dwellings per annum – dpa), Thurrock (+263 per cent, +1075 dpa), Tonbridge and Malling (+241 per cent, +1018 dpa), North Somerset (+134 per cent, +979 dpa), Teignbridge (+138 per cent, +888 dpa), Dover (+187 per cent, +833 dpa), Southend on Sea (+169 per cent, +832 dpa), Swale in Kent (+120 per cent, +809 dpa), Thanet (+246 per cent, +727 dpa), Havant (+261 per cent, +696 dpa), Isle of Wight (+199 per cent, +695 dpa), Canterbury (+162 per cent, +695 dpa),  Somerset West and Taunton (+129 per cent, +694 dpa), Blaby (+120 per cent, +626 dpa), Shepway (+134 per cent, +597 dpa), Basildon (+141 per cent, +480 dpa), Worthing (+198 per cent, +579 dpa) Sevenoaks (+222 per cent, +565 dpa), Reigate and Banstead (+104 per cent, +556 dpa), Mendip (+108 per cent, +552 dpa), Ashfield (+171 per cent, +513 dpa), Harborough (+170 per cent, +509 dpa) Waverley (+148 per cent, +499 dpa), Bromsgrove (+244 per cent, +492 dpa), Hinckley and Bosworth (+109 per cent, +464 dpa), Fenland (+114 per cent, +450 dpa), Lewes (+126 per cent, +446 dpa), Epping Forest (+104 per cent, +442 dpa), Epsom and Ewell (+266 per cent, +439 dpa), Three Rivers (+292 per cent, +438 dpa), Oxford (+262 per cent, +406 dpa), North Hertfordshire (+181 per cent, +403 dpa), Guildford (+208 per cent, +381 dpa), New Forest (+102 per cent, +395 dpa), Eastbourne (+274 per cent, +356 dpa), Cannock Chase (+146 per cent, +341 dpa), Forest of Dean (+125 per cent, +338 dpa), Rochford (+124 per cent, +324 dpa), Tandridge (+118 per cent, +289 dpa), Broxtowe (+128 per cent, +275 dpa), Hastings (+146 per cent, +269 dpa), Gosport (+461 per cent, +254 dpa), North East Derbyshire (+121 per cent, +230 dpa), Adur in Sussex (+188 per cent, +213), Oadby and Wigston (+132 per cent, +123 dpa), and Rossendale (+153 per cent, +164 dpa).

(A full list is available here.)

Take my constituency, the Isle of Wight; the proposals will see our target increased by over 50 per cent. Half the Island is designated as an Area of Outstanding Natural Beauty, yet we will be ordered to build more houses per year than either Portsmouth or Southampton, both cities with major infrastructure and services, and populations almost 70 per cent larger. This is just nonsense.

Why? First, our services and infrastructure are already overwhelmed with the increases we have already had. We have basically the same Victorian country lanes we had two centuries ago, minus most of our railways. Second, we are dependent on a tourism economy that crammed roads and shoe-horned housing estates will undermine. Third, our island building industry produces between 250-400 homes per year. It can’t build more. Our current targets are already unachievable. The Government might as well order the Island’s Council to develop a Moon Landing programme for all the likelihood of achieving these new targets.

It won’t help our young, either. Increasing in housebuilding do not necessarily result in increased affordability. (The FT explains why here.) Factors such as low interest rates, slow wage growth, and a need for the right type of homes are key. As with many other parts of the UK, we need one and two bed homes for residents, built in sensitive numbers in existing communities, with rent-to-buy schemes to support the young. We get three- and four-bed, generic (sorry, ‘superior’) housing in soul-destroying, low density, greenfield estates because that is what suits developers. From all sides of the political spectrum, people are fed up.

The Government’s Standard Method produces unviable, undesirable targets for swathes of rural England. What is being proposed is not levelling up, but a levelling down – from the cities to the shires. It will cost us economically, environmentally and politically. It will not help young people. It will worsen quality of life. It is not what many of our electorates voted for.

John Halsall: The Government must urgently think again on its new housing plan

27 Aug

John Halsall is the leader of Wokingham Borough Council.

The Cummings affair, Robert Jenrick, Coronavirus, Scotland, and school results have hugely dented us Tories. We will do badly in May unless the Government quickly learns from its mistakes.

Its contempt for local government is profound. Meaningless virtue signalling, such as “expecting new development to be beautiful” and “giving communities and neighbourhoods an earlier and more meaningful voice in the future of their area”, hides the reality that the MHCLG is proposing to give pretty much all control to developers to carpet-bag the nation.

The shambles of the top-down A Level algorithm stemmed from the fact that, despite the beauty of the formula, the consequent result was wrong. The new standard method for housing numbers and changes to the planning system suffer from the same flaw.

Its hypothesis is to over-provide on the housing target of 300,000 per annum by giving a mandatory requirement on Local Authorities of 337,000, because “not all homes that are planned are built” and “the new standard method is designed to provide enough land to account for the drop-off rate between permissions and completions”.

By using statistical growth, it puts homes where there is development, not where they are needed as the manifesto promised. This penalises those local authorities which have played by the rules, have had local plans and plan-led development. Those who have had no plan and have had little development in the main have been allocated little new requirement.

The adjustment for affordability will never do what it intends. It is schoolroom economics, naïve to the point of stupidity. Why would homes be offered at a lesser margin when the build rate can be reduced, and homes can be eked out to match demand at higher prices? This factor takes no account of local circumstances, for example where homeowners’ earnings take place in another area – common in commuting.

The manifesto promised levelling up and investment in the North, but the algorithm puts most homes in the South East:

“Prime Minister, Boris Johnson has set out an agenda for levelling up every part of the UK – not just investing in our great towns and cities, as well as rural and coastal areas, but giving them far more control of how that investment is made. In the 21st century, we need to get away from the idea that ‘Whitehall knows best’ and that all growth must inevitably start in London. Because we as Conservatives believe you can and must trust people and communities to make the decisions that are right for them.”

MHCLG has been sneaky and exercised a sleight of hand. Two planning consultations were launched at the same time in early August knowing that there would be holidays, A levels, GCSEs and quarantines. The first one – the smoke screen, “Planning for the Future” (ending on 29th October) – contains aspirations unconnected to the proposals within it, which are generating some debate and notoriety. It is a green paper looking forward to primary and secondary legislation some time during this parliament.

The “Changes to the current planning system” running alongside it has an end date is October 1. This has the meat. No debate! No appeal! It only needs ministerial approval, implementable by a simple decision on his behalf. This paper changes the standard method, allows for fifty homes to be built without affordable housing, extends the permission in principle consent regime and has first time homes discounts. It does all of these within the existing planning system.

So, what are the consequences? Most local authorities have skyrocketed increases in housing requirements immediately (though there is limited provision for delay if local plans are in second-stage consultation). On October 2, any developer or landowner can present an application. On refusal, in most cases an appeal can be won, as there will not be a five-year land supply. The developer does not need to build homes, but can just accumulate permissions; the local authority will be sanctioned for not having fulfilled the quota.

When will Government understand that “local authorities do not build homes; developers do”? There are a million homes in England for which planning permission has been granted but not built. This, at 300,000 per annum, is over three years requirement. This, along with the 187,000 per annum already in adopted local plans, would give more than eight years supply at 300,000 per annum. MHCLG needs to concentrate on what powers it will give local authorities to enforce developers to fulfil their responsibilities.

So please, before this becomes yet another algorithm shambles, rip up this white pape,r and reform the planning system in accordance with the manifesto:

  • Homes built where they are needed not determined by a one size fits all formula
  • Development to be led by plans set by local authorities with their residents
  • Developers forced to build the houses they have planning permission for
  • Removal of developers’ ability to avoid obligation through viability
  • Develop contributions to build all infrastructure needed at an early stage of development
  • Locally set percentage of affordable homes
  • Changes to the planning system to require primary legislation
  • Scrap the five-year land supply

There is no easy short-term fix; once countryside or communities are lost, they are lost forever.

Hugo Owen: Create beautiful hospitals

13 Aug

Hugo Owen is a researcher at Create Streets. Prior to that he worked for a volume house builder.  

The Health and Social Care Secretary, Matt Hancock, has made it clear that the largest hospital building programme in a generation will be a key part of the post-COVID infrastructure investment. The Government intends to invest £2.8 billion in the construction of six large new hospitals, to be delivered by 2025. What should they look like?

This is not a dilettante question. Increasingly robust data on environmental psychology, patient wellbeing, and public health, demonstrates that hospitals which are calming and green, restful and beautiful inside and out, are better for patients (they recover more quickly in beautiful and green surroundings), better for people who work in hospitals (people work more effectively in places they find beautiful) and even better for civic pride – which is good for all of us.

The importance of what hospitals look like inside and out is something we’ve instinctively known for millennia across all different cultures and climates. From the early Islamic hospitals such as the Qawaloon complex in Cairo to the healing temples (Asclepeions) in Ancient Greece, their moral mission and social significance was encapsulated in expressions of architectural beauty.

During the twentieth century, however, this principle was gradually abandoned. Instead of proclaiming their high moral purpose to their surroundings, hospitals’ measurable functionality and cost became an architectural feature in itself, transforming the hospital as a building type.

Not only did this profoundly affect the aesthetic nature of the buildings, it also negatively affected the quality of care – despite the wider advances made in scientific healthcare. In striving for readily provable efficacy, we forgot that humans are not machines. We threw out the baby with the bathwater. As one of the pioneers of the study of hospital’s effect on their patients’ health, Professor Roger Ulrich, put it: ‘This desire for functional efficiency, together with the pathogenic conception of disease and health, has helped to produce healthcare facilities with environments starkly institutional, stressful, and detrimental to care quality.’

Somehow, somewhere, we have lost not just the ability but even the desire to create public buildings of beauty and moral worth. Rather than the two jostling for superiority, as it had done to create, for example, the ‘cure porch’ in America, modern hospital design, like modern architecture, denounced the ideal altogether. Evidence from one architect for the Building Better Building Beautiful Commission last year highlighted the extent of the problem: “I was working on a Private Finance Initiative project ten years ago, and we were told by the contractor to put in a more expensive material that looked cheaper, because there was real sensitivity about anything in the NHS looking expensive.”

Not only are we the richest society to ever live, but we are the most advanced in our understanding about what environments we react best too. Nevertheless, we choose to turn our back on beauty, scared by the very concept of the word.

The hospital building programme surfaces this debate once again. Do we really want to follow on from where the PFI programme left off? You only need to look as far as the Royal London Hospital or the Royal Liverpool University Hospital for your answer.

Create Streets’ recent research note, Why we should build beautiful hospitals, argues for a complete rethink of how we design and create hospitals, remembering that patients are humans not ‘machines for getting better’ and drawing upon both the past and the latest research for answers to the future. How can we create places that patients, staff, and communities can cherish and in which they can flourish? The evidence suggests some key themes.

Firstly, we should create gardens that patients and staff can see and use. Hospitals with ready access to green space (think beautiful internal courtyards) alleviate stress, improve job satisfaction and improve recovery times. For example, a carefully controlled study found that gallbladder surgery patients assigned to a room with a window view of a garden or natural setting had shorter postoperative hospital stays as compared to patients in similar rooms with windows facing a brick building wall. Despite this, concepts such as Horatio’s Garden still remain one-offs rather than mainstays in the UK. You only have to look as far as Singapore to see how it should be done. The Khoo Teck Puat Hospital in Singapore integrates greenery into design at a monumental level. It has 15 onsite gardens with over 700 species of native plant.

Secondly we should create hospital with large windows, not just piped air. One doctor working in Charing Cross Hospital (built in 1973) told us:

“There were some days when I felt physically unwell just from being in the hot stuffy doctors’ room with no window, no air, and horrible smells.”

The advances in artificial ventilation models means that windows are no longer irreplaceable. Yet a range of studies now show that large windows and high ceilings are normally more successful at lowering infection rates and levels of harmful bacteria, than expensively and artificially ventilated rooms – one study found a differential of 28 per cent. And that’s not to mention the wider benefits. Research by the Department of Neuropsychiatric Sciences at the University of Milan found that patients with bipolar disorder assigned to brighter, east-facing rooms with morning sunlight had hospital stays nearly four days shorter than those with west-facing rooms.

Hospital should have variety in a pattern. Too many modern hospital layouts are bland and sterile. Not only are all the rooms the same but the corridors that lead to them and the doorways that give entrance to them are normally undifferentiated. The sensory and aesthetic experiences of patients are not held to be crucial to their treatment for or recovery from illness. However, the evidence suggests that this is a mistake. Studies suggest that environments that lack positive distractions causes patients to focus increasingly on their own worries, fears or pain.

We should also create calmer and quieter environments. In the UK, 40 per cent of hospital patients are bothered by noise at night, according to in-patient surveys. This is far too high and provably bad for them.

I could go on. If we design places with human scale, coherence, and complexity with variety in a pattern, and some symmetry, we are designing places that most people prefer and find more settling. That is better for all of us, and for neighbourhoods than huge anonymous boxes. This should not be a top down approach however. Throughout, public engagement, citizen involvement in scheme selection and data on local preferences should underpin the process to avoid some of the major errors of the last 50 years in public sector procurement.

2020 has retaught us of the importance of where we live and spend our time in sickness and in health.

It is right that the government is parsimonious with public money. It is the tax-payers’, not theirs. Nevertheless, it is possible to be penny wise and pound foolish. Many public sector procurement processes over-emphasise short term cost and under-emphasise lifetime costs. Few if any none properly factor in the long-term financial benefits of creating beautiful restful environments in which patients and staff can thrive and in which a local community can take pride. This should change.

Andy Street: Our blueprint setting out the economic ambitions of the West Midlands

30 Jun

Andy Street is Mayor of the West Midlands, and is a former Managing Director of John Lewis.

Last week saw the launch of a blueprint setting out the post-Coronavirus economic ambitions of the West Midlands. As a manufacturing heartland, where draftsmen drew up plans for everything from steam engines to Spitfires, blueprints are in our blood. They illuminate our history. This intentionally ambitious £3.2 billion business case draws a clear trajectory to our region’s future.

As Mayor of the West Midlands, it’s my job to attract as much investment as possible. Rishi Sunak’s bold and decisive actions – notably through the furlough scheme – have provided unprecedented economic support for jobs during lockdown. Now, demands on the public purse are high. All investment must be fully justified, diligently used and – crucially – deliver real results. Every penny counts.

Our region was the UK’s fastest growing outside the capital until Covid-19 struck, and as a hotbed of export, manufacturing, construction and professional services, we play a key role in the UK’s economic success. This new blueprint lays out a powerful business case for how continued investment can spark rapid and sustained recovery, not only for us here but for UK PLC.

Our ambition is deliberate because the stakes are high. Research suggests we could be hit harder than most by the lockdown. When coronavirus struck, the West Midlands was in a strong economic position, with record employment figures and productivity growth well ahead of the national rate. However, our economic mix – dependence on manufacturing and business tourism, as well as a significant contribution from universities – leaves us vulnerable.

By following the blueprint we have drawn up, the Government can demonstrate its commitment to ‘levelling-up’ by backing the people of the West Midlands to deliver.

We need to do everything we can to get back on our feet quickly and return to the levels of success we were enjoying before the outbreak hit. That means driving a rapid economic recovery, safeguarding more than 135,000 jobs while building thousands of new homes. It also means learning the lessons of the financial crash of 2008/09, and listening to business.

Investment is crucial. However, while we need significant investment from the Government – £3.2 billion over the next three years – this is broadly in line with the £2.7 billion investment we have secured since 2017, which supported strong economic success here.

Our business plan is to build on our success and on the investment we have already attracted from Government, while leveraging much more private and public sector investment locally, including from our universities.

The blueprint sets out a business case for investments, while outlining the economic benefits they would deliver. For example, it directly supports our automotive sector by harnessing clean technology and electrification. A major investment package, including £250 million towards a Gigafactory producing state-of-the-art batteries, will unlock 51,700 green jobs.

The building of HS2, next year’s Coventry City of Culture festivities and the Birmingham 2022 Commonwealth Games present opportunities to create jobs for local people. By accelerating major infrastructure investment and supporting the recovery of the tourism and cultural sector we can unlock 33,000 jobs.

Then there is the West Midlands’ growing reputation as a hotbed for health research. By investing in healthcare innovation we can protect 3,200 jobs, while improving the health of our population.

Improving transport, housing and digital infrastructure will play a key part in a rapid recovery, while laying the foundations for future economic strength. We can build better transport and digital links to drive productivity and create thousands of jobs in construction. Schemes include extending rail, metro and bus routes, with cash for enhanced digital connectivity and to accelerate fibre connectivity in deprived areas. Reopening long-closed railway stations will better connect people to employment opportunities, attract investment into once-isolated areas and improve productivity.

The West Midlands has pioneered the regeneration of brownfield sites to tackle the housing crisis, while protecting the environment. We even have our own regional definition of ‘affordable housing’ applied at planning level by the West Midlands Combined Authority. We want to build 35,000 new homes – 15,000 of which will be affordable – with a focus on housing key workers. Plans include using a £200m investment package to regenerate derelict eyesores and £24 million for a new National Brownfield Institute in Wolverhampton, which will be a centre of excellence for land reclamation.

Investment to equip people with the skills needed for the future aims to help get them back into work. This includes helping 38,400 young people obtain apprenticeships and work experience, retraining 20,000 workers for in-demand sectors such as health and social care, logistics and business services, and upskilling 24,000 for jobs for the future.

Finally, we want to back the region’s businesses with support schemes – including helping them navigate their way through the post-lockdown world – creating or safeguarding 43,900 jobs.

This ambitious business case is based on our region’s experiences not only of recovering from the last downturn, but on the successes of the last three years. The blueprint has been developed as a team effort between the region’s local enterprise partnerships, universities, business groups and local authorities.  Crucially, some of our biggest employers have also shared their insights about how the region can play its part in securing a strong national recovery, putting central investment to good use.

For the UK to fully recover, all of its regions must recover too – creating a stronger country with a more robust, balanced economy.