As a planning academic you might think that I get heavily involved in the planning system – commenting on draft development plans, or objecting to proposed developments – but actually I tend to steer clear of this. Recently, however, Read more
Posts tagged ‘planning’
Town planning began as a service to people, and its social roots continue to drive it towards this goal. This kind of language infiltrates plans and policies throughout the UK, but in the messy political world of planning, who makes up the ‘people’ for whom we plan? Read more
Our next IHURER seminar will take place Wednesday, 5th June when Prof. Mark Stephens will be presenting on something a little different. “The battle to protect New Lanark and the Falls of Clyde” will be a case study of policy interpretation and its wider social ramifications today. Read more
“Children are the future” and “Let’s do it for the kids”. These are the kind of phrases you often hear when talking of the legacy we wish to leave our planet, but what if children are just as much citizens of the present as they are the future?
Jenny Wood is a postgraduate student on the MRes Urban Studies Research programme and has started her PhD into the value of children’s engagement in the planning process. Watch how she turned her research into a fantastic comedy show at the famous The Stand Comedy Club in Edinburgh.
Britain’s housing crisis appears to be deepening, and attracting widespread comment in the media. Professor Glen Bramley, Director of IHURER, explains what policies could promote greater housing supply.
Britain has a serious housing shortage. My colleague Colin Jones blogged on this topic a few weeks ago. This week I had the opportunity to speak at a seminar in Bristol, sponsored by the South West Observatory, on planning for new housing, sharing a platform with among others the Minister for Planning and the newly elected Mayor of Bristol.
Bristol and the South West of England generally are in the front line of this hot issue. As someone who previously lived in Bristol for 21 years and has undertaken a number of studies of housing markets and housing needs in this region, I feel moved to offer some comments. You can find my presentation here.
In my opening contribution to this Policy Blog I wrote about ‘evidence based policy’. The commitment of the present Coalition Government to an evidence-based approach to policy is, shall we say, a bit variable. However, I would make the observation that the planning system is structured and premised on the principle of basing plans on evidence, not least in the contentious area of new housing supply. The recently-revised National Planning Policy Framework (NPPF) for England attracted a lot of anxious commentary about opening the floodgates to ill-conceived developments through its ‘presumption in favour of sustainable development’. But the revised document is very clear that the remedy lies in the hands of local authorities. They need to have in place a Local Plan which provides enough land for new housing development which meets the need and demand for new housing, backed up by sound evidence of that need and demand.
The Government appears to recognise that there is a problem of housing supply and that better planning is needed to tackle this. Unfortunately their first major step on entering government, foreshadowed before the 2010 election, made the problem a whole lot worse. They scrapped the regional tier of planning and associated ‘top down’ targets and handed the decisions on how much land to provide to the local authorities and (in some circumstances) local communities. While doubtless electorally popular in some quarters, this hasty move to ‘Localism’ in planning confronts them with a major obstacle to increasing housing supply. Public sentiment across most of England is quite strongly opposed to new housing development in the local area- NIMBYism is widespread and respectable.
The 2010 British Social Attitudes Survey showed that opponents of housing development outnumbered supporters in the ratio 3:2 and this pattern applied in most areas, particularly those parts of southern England where the need for more housing is most pressing. The survey provided some glimmers of hope that more people might be persuaded to support development if they were confident that it would bring in its train certain improvements to local infrastructure, and if the type of housing was more suitable (e.g. affordable for new households). Putting a reasonable interpretation on these data, and linking with other evidence including 2010 voting patterns, I developed predictions about what would happen to local plans for housing across all the local authorities in England. The overall conclusion was still pessimistic, in suggesting that the number of authorities cutting their planned housing numbers would be almost double the number increasing them, and that the reductions would be concentrated in the South of England.
Recently, the consultancy Tetlow King have updated their survey of changes in planned housing numbers to late 2012. Of the three-quarters of authorities which have decided, the pattern of change is quite similar to that which I predicted. Although there are a few more cases of increases in the south than I had estimated, the number of reductions is even greater in certain key regions, notably the South West and also the West Midlands.
My analysis of existing planning stances towards housing and likely/emerging changes shows that these patterns are generally perverse, in the sense that policies are more restrictive and changes are more negative in areas which already have very poor affordability and higher levels of need. They are also perverse in the sense of being more restrictive in areas which have (on evidence of trends over the last couple of decades) the greater potential for economic growth. These conclusions also echo the arguments of the Centre for Cities in their contribution to the conference.
The Bristol sub-region is actually a striking example of this. It has some of the worst affordability indicators outside the London area, and it had some of the highest increase in jobs in the period 1997-2007. Yet in 2010 these local authorities reduced their already inadequate plans for new housing by about a third. They reversed previous decisions to support several significant urban extensions to the Bristol conurbation, primarily on grounds of wanting to preserve existing ‘Green Belt’ boundaries. One of the authorities involved is currently subject to a High Court challenge on this.
It was interesting to share the platform with the minister on this occasion. He pointed out, quite rightly, that I had not tried standing for election on this issue of building more housing. It was noted that the dominant group voting in local elections were comfortable, middle aged, middle class home owners who were not directly affected by the adverse effects of the failure to build housing. There was no disagreement about the outcomes we were trying to achieve. He observed that he found himself as minister in a position where he could pull various levers but they did not necessarily have much effect on the ground. I was too polite to point out that part of the reason for that was that his boss Mr Pickles and predecessors Grant Shapps and Greg Clark had deliberately sawn through the rods and wires connecting national policy and local plans when they scrapped regional planning and housing targets and embraced localism in 2010.He ended on the point of making what amounted to a moral appeal to local authorities and communities to acknowledge the needs of younger people to get a chance to access the housing market. A number of us present felt that this was tantamount to admitting that he recognised that the current policy set-up was likely to fail.
Leaving aside the politics, there are also issues here about the nature of evidence. Traditionally planning relied on a mainly demographic approach, centred around household projections. This is a useful starting point but has its limitations, because ultimately trend-based projections tend to build in the suppression of household numbers by inadequate supply, a form of ‘circularity’. The Barker Review of Housing Supply in 2004 introduced the concept of treating affordability as a key outcome to be targeted through planning. Local housing need and market analyses pay increasing attention to affordability, and there is plenty of evidence on this. I would argue that attention should also be paid to indicators of unmet housing needs, such as overcrowding and concealed households, which national surveys show to be deteriorating, alongside measures of homelessness and waiting lists (see our recent Homelessness Monitor for Crisis. I would also argue that assessments of housing requirements should pay attention to prospective growth in employment, both in order to support economic growth and in order to promote more sustainable patterns of commuting.
There is also an evidence challenge which goes beyond the range of types of measures. Because planning is about future needs, the most appropriate evidence would arguably be forecasts of future demand, supply and unmet need. Indicators of current needs and problems provide a useful starting point, but are not conclusive; present problems may resolve over the market cycle, or they may progressively intensify. Forecasts are more demanding, particularly in a complex and potentially volatile market like housing. It is quite common to use projections of future need/demand, generally based around the household projections and assumed trends or levels for key indicators like affordability or the tenure shares. But almost by definition, these approaches cannot deal with discontinuities, changes in trends, major cyclical disturbances or regime changes. Robust forecasting models for housing at the appropriate sub-regional scale are still in their infancy, unlike the situation in certain other sectors like transport.
For our sins we have tried to develop sub-regional models to forecast housing markets, affordability and housing need. We do not claim that our models are the last word on the subject; quite the reverse. The models are quite complex and require quite a lot of data input (ideally key numbers going back over quite a long time period). Some may criticise them for being ‘black boxes’, although I would refute that in respect of the models I have developed, which sit in a quite transparent form in a familiar spreadsheet setting. We have recently had the interesting experience of establishing a working model, whose architecture is based on a sub-regional model developed for Gloucestershire, in a different country (New Zealand). These models are particularly useful for showing the interdependence between the situation in one area and what is happening in other surrounding areas and at national level.
The people in the front line of deciding whether local plans are ‘sound’ in terms of their interpretation of the evidence on need are the planning inspectors (‘PINS’). I am not sure what skills and training they have in the area of modelling and forecasting, but my impression is that they are more comfortable in the traditional territory of household projections than in the newer world of economic models.
Those opposed to planning for more new housing have taken perverse comfort from the effects of the Credit Crunch, Global Financial Crisis and resulting recession. This ‘proves’ that the previous housing boom was due to lax bank lending rather than an over-tight housing supply. With housebuilding running at half of its previous level, there is no immediate pressure to release more land. With developers sitting on record numbers of outstanding planning permissions, it is easy to blame them. The fact that this is turning into the longest recession/depression on record does not help, in enabling these debates and diversions to continue indefinitely. However, we are beginning to see some revival in mortgage lending and housing market transactions, and house prices are rising at least in London and parts of the south.
While regional planning may have fallen out of favour, there is close to a professional consensus that the right area to plan housing provision for is that of the ‘housing market area’, and these geographies are generally sub-regional in scale and larger than individual local authorities. This does not entirely square with the official mantra of localism. It is very clear from my modelling work that local housing markets are very open, and that the effects of new housing supply on house prices and affordability are not only quite spread out over time but also diffused over a wider geographical area. This means that an individual local authority has a limited incentive to release more land for new housing, even if they are motivated ‘morally’ to ‘do the right thing’. If the other local authorities in the surrounding areas do not act in a similar way, the benefits in terms of affordability will be small. I have written in various papers about this as a sort of planning version of ‘the prisoners’ dilemma’.
The Government recognises this to a degree in that the Localism Bill imposes a ‘duty to co-operate’. The way that this is interpreted, by Local Authorities, PINS and Ministers, should be watched with close interest.
I concluded my remarks to the Bristol gathering with a few modest policy suggestions, relevant to the general mission of trying to promote greater housing supply.
- Smarter incentives – there are now various incentives in the system (‘New Homes Bonus’) but I would argue that these should be bigger, but more targeted on places which needed an increase and were willing to make a quantum increase (above a threshold); such a super-bonus should be conditional on sub-regional cooperation.
- Urban extensions are very often the most sustainable way of providing large increments to housing supply ( because they can tie in with existing infrastructure and transport routes, and reduce the length of travel and car dependency), but this often requires redrawing of Green Belt boundaries. Traditional ‘polo mint’ traditional Green Belts designed in the 1940s are not fit for purpose in the 21st century. There is more biodiversity in many surburban gardens than in typical agricultural ‘monoculture’ fields. I am all for permanent protection of the best green landscapes, but that is not what a lot of Green Belts are.
- Maintain section 106 planning agreement mechanisms for affordable housing – we need a lot of affordable housing and this is the main way to subsidise it, when government has little or no money to offer for this purpose.
- Land development agencies – getting developers to build is like pushing string; you can give them permission, but they do not have to take this up and can determine the rate of buildout.I would establish in key growth areas a public/private agency to bring land forward and auction it to builders on license, requiring them to deliver prescribed minimum numbers each year. I was interested to hear the new elected mayor of Bristol George Ferguson talking about his plans for ‘Property Board’ which may, through pooling public and private land resources, play a role of this kind.
- PINS need to apply more rigorous approach to assessment of housing requirements, as argued above.
Judith Montford is doing PhD research at IHURER into the relationship between different residential layout/patterns and mental wellbeing. Here she describes how she became interested in the way our natural and built environment influences our lives.
A question anyone who wishes to a PhD should ask themselves is ‘why they want to do it’. A PhD is not to be undertaken lightly, because it is about influencing and affecting lives for their betterment. You should have a natural desire to want to work towards these goals, otherwise you will make no impact and it might be an unwise use of three years – and sometimes a bit more – of your life.
I did a MSc at Cardiff University (Planning Practice and Research) and I enjoyed it very much because I got a good understanding of what spatial planning is all about – planning places for people to live successfully (I cannot write here what successful is, but it covers a multitude of sins, literally sometimes). I later on worked in planning practice for a short time to get some hands on experience as well. I found that my quest to know more about the places we live, by ‘doing and learning’ was insatiable. I have always been awestruck with the way and how our natural and built environment influences our life styles or how we interact with it. Programmes like ‘The BBC human planet’ series and ‘Amazon’ by Bruce Parry makes it all too clear how mankind relates with their environment. Whether planned or unplanned, there is still an effect. I once read about how the layout of slums influenced the slum dwellers social life and it was interesting to learn that what was not intentionally planned ended up being very useful in building a community. There was a real sense of community and this was by virtue of the way the slum environment was laid out – lines and patterns.
We ‘plan’ to make lives better in essence, so being curious I wanted to find out how useful what has been planned is to us, especially our wellbeing which can be generated by having good relationships with the people we live with. Well we know it is not that straight forward, but that is what I like about this, finding out what works and how. How our environment is affecting our wellbeing. This is now part of the agenda in spatial panning to work towards positive and public health. Actually it is going back to the roots and birth of planning practice. Interestingly an opportunity came up for a PhD research on this subject matter here at Heriot-Watt University, School of Built Environment. I applied for it and I am here now working on this research about our wellbeing and our residential environments.
To do a PhD, there must be a genuine interest first of all in the particular subject the research will be on. This is very important to keep you going during the difficult time which is inevitable. There is the danger however of having a ‘tunnel vision’ of your work when you are passionate about it; however that is the time you rely on the advice of the research community. Though the research is your ‘favourite cuddly toy’ ‘outsiders can see that a rip needs to be patched before it gets ‘worse’. An objective advice is always at hand.
Research is a process. It is evolutionary, but it also oscillates a great deal and you must be prepared for this. This oscillation is challenging at most times because at every stage there are things you go through, or things that happen to test you. It is essential that these processes, changes and challenges happen, for it makes you creative. You think more, you connect with the environment and yes – you grow and discover aspects of your person you did not know existed.
Some say the PhD process is lonely, but this has not particularly been the case for me. Though your project is your responsibility and you have to ensure it progresses. This is in no doubt a challenge and requires hard work, but you are not alone. Research projects are acquaintances, so you are part of a whole. Also, IHURER is a community and there is support if and when you need it. Apart from my supervisors, I have found colleagues and seniors to be very helpful, which is comforting. Apart from the support and help I get directly related to my research project, I have made friends for life. The community is also diverse and what I have learnt and continue to learn from friends has been priceless – no book or guide could have taught me this.
The IHURER research community focuses on ’real life in continuation’. This applies to all the research work being undertaken here… it is about what is really happening out there and not just ‘fantasy projects’.
What I like about being here is the fact that your professional development (not only the academic) is also taken care off. We have PhD students going away to do internships with some prominent organisations (Scottish Government, NHS) and some have secured jobs because of this. I have been given the opportunity given to help with teaching some very interesting courses. I see this as the way to go, as the PhD is for a set time but the extra you gain alongside helps to make the whole experience worth it as well as gets you ready you for the future.
I cannot say all this without saying a bit about Edinburgh – it is a beautiful city with very interesting people –robust if I am allowed to say that…. Coming from tropical Africa, I must admit that the weather here has a hard time deciding what it wants to be. It is very changeable, but that should not deter you, it is part of the experience and with everything else, it makes it worth it.
Heriot-Watt University campus itself is great for studying whether living on or off it. The environment is quiet green and there are lots of places to go for respite when needed. The School actually won a Green Flag award for the provision of its community parks and green spaces.
The student community on campus is diverse (students from different countries all over the world) so ‘home’ is always close . I could go on….
I consider it a blessing that I am here as part of the IHURER research family, and I am looking forward to the future. Really….it is full of promises.
IHURER is currently advertising full and part funded PhD scholarships on a variety of subjects, including Poverty and Social Exclusion, Inequalities in Access, Use and Participation within the Built Environment, International Housing Policy and many more. In addition, two scholarships linked to the ESRC large grant Sanctions, Support and Behaviour Change: Understanding the Role and Impact of Welfare Conditionality are now available. Application deadline: 30th of March
Dr David Simmonds, Honorary Professor at IHURER, presented his work on ‘Land-use/transport interaction models’ on Tuesday 19th of February 2013. These models are used to inform planning and infrastructure problems. The first part of his presentation outlined the ways in which land-use/transport interaction (LUTI) models can provide insights and evidence to inform policy- and decision-making in land-use and transport planning, housing policy, environmental protection, etc. This referred in particular to the use of LUTI models as part of Transport Scotland’s programme for Land-use and Transport Integration in Scotland (LATIS). The second part considered the ways in which research into housing and commercial property markets can be (and is being) used to inform and enhance these models, with examples based on research carried out as IHURER, and possible implications both for modelling and for research.
David Simmonds studied Town and Country Planning at the University of Newcastle upon Tyne, and the use of mathematical models in planning for his PhD at Cambridge. He worked as an Economic Analyst with London Transport before joining ME&P as a consultant. In 1990 he set up David Simmonds Consultancy, particularly to develop and apply improved methods of forecasting the interactions between land-use, transport and the economy. David has directed a wide range of projects including forecasts used in public inquiries for Edinburgh Congestion Charging and the M74 completion. He has also been responsible for a numerous other studies including contributions to the 1999 SACTRA report on Transport and the Economy. He is a regular contributor to professional conferences, has published papers in journals including Environment and Planning B and Transportation Research Record, and is joint editor of a recent book on residential location models.
|Tuesday 19thFebruary||4.15pm||Heriot-Watt University, Room WA311||Dr David Simmonds,DSC & Honorary Professor, Heriot-Watt.||‘Land Use-Transport Interaction Models: insights and implications for planning, and enhancement through housing and property research’|
Tea & edible goodies provided at each session – please come along!
For more information about the IHURER seminar series, please contact:
Dr Nicola Livingstone: email@example.com
Dr Filip Sosenko: firstname.lastname@example.org
Professor Glen Bramley: email@example.com
IHURER PhD student Kathryn Gilchrist is currently writing up her PhD, which focuses on how access to greenspace and nature in the work place affects people’s health and wellbeing. Her research was funded by the Economic and Social Research Council (ESRC). In this post, she describes what it is like to do a PhD at IHURER
I’ll be honest; before coming to Heriot-Watt I had never intended to do a PhD. It wasn’t a long-standing ambition of mine at all. Yet now I find myself nearing the end of my time as a PhD student in IHURER and couldn’t be happier about the path I stumbled onto. I first came to the School of the Built Environment (SBE) here at Heriot-Watt Uni as a postgraduate on the MSc Urban Planning course. My background was in environmental science, but I didn’t want to be a scientist – what really interested me was how people and their environments interact. The more I learned about planning and urban research, the more hooked I got. I wanted to keep learning more, and I wanted to do that in SBE. I liked the fact that research here isn’t about navel-gazing; it’s about real peoples’ lives and building an evidence-base to influence the decisions made in policy and practice that affect us all. By the end of the MSc year I had, with the encouragement and advice from IHURER staff, successfully secured a place and funding to study for a PhD in the department.
This isn’t to say it was an easy decision to make. To dedicate yourself for three or more years to a single research project that you, and only you, will design, implement, analyse and report can be a scary prospect! Deciding to do a PhD is a huge commitment, and certainly not something to take lightly. The important thing is that doing a PhD isn’t just about the end result – producing a piece of original research – it’s also process of training and learning the tools of the trade, developing lots of skills like critical thinking, communication, organisation and self-motivation. It’s an apprenticeship in research. An inevitable part of that is having to learn by trial and error, false starts and ‘back to the drawing board’ moments. The great thing is that you’re surrounded by like-minded people who are coming up against similar obstacles, or have done in the past, and can offer advice or support. We have a great research community here at IHURER, and because of the level of support both from academic staff and from fellow students, although your project is ‘your baby’ you’re never out there on your own.
Having said that, I don’t know if I would have gotten through the more challenging times if I didn’t have a strong interest in my topic. I study how access to greenspace and nature affects peoples’ health and particularly their mental wellbeing, and although it’s a complex subject it’s absolutely fascinating. I really wouldn’t recommend doing a PhD on anything you don’t have a genuine interest and curiosity for; that way madness lies! But if you do have that, it can be a really rewarding process. I (and others I know) found it all too easy to panic a bit in the earlier stages when you don’t yet have a defined research design, there are so many decisions to be made (all of which feel like they might determine your success or failure, though they most probably won’t), and you aren’t 100% sure you’re capable of pulling off what you do have planned. However, when things do eventually come together and you manage to successfully gather your data and (hopefully) produce some interesting findings, the feeling of achievement more than makes up for the tough periods!
Of course there’s more to PhD life in IHURER than just the studying part. Given the focus of my research especially, it’s really important to me to be able to take a break and within a couple of minutes wander from the building I can find myself in beautiful woodlands, feeding the swans and ducks at the loch (lake for those of you not familiar with the Scots!), or relaxing in the landscaped gardens of the old family estate that Heriot-Watt occupies. Another major benefit is the research student community here. It’s a really friendly department to be part of, and because we have such an international student community studying here has meant I’ve made friends from all over the world (and had some interesting experiences with some of their native foods!). Student satisfaction is high in the university overall as well – we are the no. 1 university in Scotland for student satisfaction (National Student Survey 2012) and for the last two years running have been the Sunday Times Scottish University of the Year (and top in the UK for student experience). Then there’s the added bonus of living in the beautiful historic city of Edinburgh – it’s not consistently voted one of the UK’s most liveable cities for nothing!
If you think a PhD at IHURER might be for you too, why not check out the PhD scholarships available at the moment?
IHURER is currently advertising two ESRC Project Studentships linked to the ESRC large grant Sanctions, Support and Behaviour Change: Understanding the Role and Impact of Welfare Conditionality (Application deadline: 30th of March)
In addition, IHURER is advertising full and part funded PhD scholarships on the three topics below: (Application deadline: 30th of March)
In November 2011, David Cameron promised a package of policies to “get Britain building again”. Colin Jones, Professor of Estate Management at the IHURER research institute explains why housebuilding in the UK still fails to keep pace with population growth.
A UK government report in 2007 noted, “For a generation, the supply of new homes has not kept up with rising demand.” The veracity of this statement is reinforced by the 2011 Census that reported a 7% increase in the population of England and Wales and 5% in Scotland over the previous decade. An increase that was much higher than expected. Meanwhile 2007 turned out to be the peak year for UK house building and annual completions fell by 43% by 2010-11 following the credit crunch.
New house building in the UK was 146,460 units in 2011-12 which was the second lowest total (the previous year was the lowest) since 1924. The quarterly statistics on completions for 2012 published so far suggest that this financial year is on course to be even lower than 2010-11. In other words a new low. House building is simply not responding to demand in the short or long term.
The essential direction of the balance between house building and demographic change has been acknowledged in the policy pronouncements of the Coalition. The government offers all the right sound bites. In November 2011 David Cameron said, ”We are determined…to get the market moving” and “get Britain building again”. The policy package that accompanied these statements became live in April 2012:
- A stimulus to the Right to Buy in England by increasing discounts to a maximum of £75,000 was designed to generate funding new funding for affordable housing. (The government calculates that for every council house sold the funds will be sufficient to build a new affordable home).
- A mortgage indemnity scheme enables buyers of new homes to borrow up to 95% of their value. The government underwrites part of the associated risk. (The previous government’s policy of exempting first-time buyers from paying stamp duty on homes valued up to a £250,000 threshold lapsed at the end of March 2012.)
Both these schemes are attractive because they effectively cost the government nothing in the short term. There have also been changes to the planning system to stimulate new building.
The government has high hopes for these policies and they were trumpheted in the list of achievements in its Mid-Term Report. At the announcement of the indemnity scheme it was billed as potentially helping 100,000 people in England. However, in the first three months it supported only 250 new house buyers. It was anticipated by the government that the changes to the Right to Buy would stimulate an additional 20,000 sales over its first three years. Given that there were only 3720 such sales in 2010-11 and that the number had been broadly unchanged for the previous three years too this forecast appeared to be wishful thinking. Indeed actual sales in the first half of the latest financial year were only 1487 so the numbers are falling not rising. The government appears at best optimistic about these policies in the short term. And of course it will be some time before receipts from sales can be translated into new affordable housing. This also applies to the planning changes designed to stimulate new building.
But the problem is not just about the low numbers of new houses and the associated nimbyism and planning regulations. The picture is worse than it appears because of the types of houses being built. Look first at the private sector. In the late 1970s and 1980s the private house building industry focussed on starter homes offering small cheap flats and houses, but the house building industry working model is now generally high price, high mark up and low output of family homes and ‘luxury’ city centre flats. The average price of a new terraced or semi-detached house is £200,000, beyond the reach of most households even with just a 5% deposit.
Meanwhile with public sector expenditure reductions there has been an invigorated effort to make public sector subsidies (and now right to buy receipts) go further by reducing state support for new housing built by housing associations. In effect this has meant a redefinition of affordable housing provided by this sector. The result is that this publicly supported housing will need to charge much higher rents than traditionally for social housing, the order of 80 to 90% of market rents. Whilst ostensibly aimed at ‘areas where there is a demand for affordable housing’ the new schemes need to be in localities where they are viable, and these are not necessarily be those that have the greatest need. These new properties also attract professionals currently housed in the main stream private rented sector at rents that are equivalent to mortgage repayments. Indeed the advertisements for completed schemes note priority is given to applicants on high incomes that do not require housing benefit, and households do not have to be an existing social tenant or even on the waiting list.
The consequence is that new housing supply is offering an increasingly narrow menu – the dominant private sector is building for sale primarily at the top end of the market for high income families and the state is supporting housing at rents just below market levels to households who until recently would have bought. The policy language is all about helping households on to the housing ‘ladder’, and is implicitly a trickle down solution to the housing problem. Within this perspective new houses built at the top end of the market are bought by the rich who then vacate houses that are smaller/lower priced for the next lower income group to move into, and so on down the housing market chain. So the new affordable housing for rent at near market rents reduces the pressure on social housing indirectly by building housing for richer households.
Unfortunately there are a number of spanners in the argument. The mythical housing ‘ladder’ has first time purchasers buying a cheap starter home and gradually progressing by trading up. Yet the ladder is something of a mirage as many two income professional households start well up the ‘ladder’ and trading down can be a reality for many households. Family wealth is also an important influence on demand via mum and dad helping with the deposit or from inheritances. Any housing market chains created by these new government policies are likely to be very short, at best simply creating more space in the private rented sector for the squeezed middle, “Generation Rent”.
Many of the young people who are struggling to afford a home of their own will not be able to afford the mortgage payments on an expensive new home, even with a 5% deposit. The trickle, and a lagged trickle at that, of new houses generated by these policies will not keep pace with demographic growth and have only a marginal direct benefit to “Generation Rent”, and most importantly offer no indirect help to housing the poor. These trickle down policies may cost very little but they also achieve very little. They will not get the ‘housing market moving’ or ‘Britain building’.
Colin Jones is professor of estate management. His publications most directly linked to this blog are:
“The UK Housing Market Cycle and the Role of Planning: the Policy Challenge following the Financial Crisis” chapter in C Jones, M White and N Dunse (editors) Challenges of the Housing Economy: An International Perspective, Wiley-Blackwell, Oxford, 2012.