Is the development sector moving towards a politics-free environment? That appears to be the case.
As the General Election approaches, the property sector is urging politicians to address the pressing issues surrounding the UK's housing market. One of the key points of discussion is the separation of land ownership and politics in the housing sector.
While there are no direct government proposals yet to fully separate land ownership or control from political entities, current reforms in governance structures and legal frameworks reflect an ongoing effort to recalibrate the relationship between politics, land, and housing development.
Local Government Reorganization
The UK government is encouraging local councils to reorganize into simpler, larger, but still locally responsive units. For example, Derbyshire is proposing two new councils to balance scale and local connection. This consolidation of local authority levels could indirectly affect the governance of land and housing supply.
Planning and Development Proposals
Government actions, such as publishing lists of new potential towns and reforms to commercial lease terms, indicate a move towards enhancing housing supply and market flexibility. These measures suggest an attempt to mitigate some market distortions impacting housing development.
Potential Impacts on the Development Industry and Housing Supply
Streamlined local government structures may enable more coordinated planning decisions, reducing bureaucratic delays and fostering faster development delivery. Reforming rent review mechanisms could make commercial rents more flexible, potentially lowering barriers for developers and investors. However, more centralized local authorities might face challenges balancing broad housing targets with local community preferences.
The Developer's Utopia
Ideally, the abolition of planning committees would lead to increased consistency and transparency in planning decisions. Elements of the planning system, like Labour's Regional Spatial Strategies and Regional Assemblies, can be successfully disentangled from politics to the advantage of all involved.
However, the competition for available land, higher bids, less variance between conditional and unconditional offers, and a dilution of the quality of new communities or substantial reduction in benefits such as open spaces, community infrastructure, social/affordable housing, and invariably perpetuate house price rises.
Politics Remains Involved
Politics would remain involved in the development sector, focusing on fiscal initiatives such as helping first-time buyers and incentivizing downsizing. The shortage of consented land is compounded by delays in the planning system, which are due to the failure to resolve the nutrient neutrality problem, under-resourcing of local planning authorities, and inertia in local plan production, especially in authorities dependent on Green Belt release for growth.
The Road Ahead
The new National Planning Policy Framework (NPPF) shows that 232,820 net additional dwellings were delivered in 2021/2022, but this falls short of the government's stated target of 300,000 homes to be built year on year from 2025. The statement by Michael Gove to make government-set housing targets more flexible resulted in many local authorities stalling their local plans in anticipation of further clarification, which is still awaited.
Greater consistency in housebuilding input can be achieved through greater consistency in the requirements made of developers. Land assembly is a long-term process that should operate outside the remit of local authorities to ensure consistency and avoid being delayed or rushed due to political considerations.
The Home Builders Federation (HBF) states that England is the hardest place in the developed world to find a home, with the lowest rates of vacant homes across all OECD nations. The 1997 Labour government took interest rates out of politics, a move previously unimaginable. The HBF's ten-point plan for government action suggests that politics often gets in the way of practical solutions to the housing crisis in the UK.
With each of these factors being the result of recent political decisions, the argument in favor of separating land from politics has never been more valid. The debate continues as the UK strives to find a balance between political influence, housing supply, and community needs.
- The UK government's proposal for local councils to reorganize and consolidate could indirectly impact the relationship between politics, land, and housing development.
- Reforming rent review mechanisms and commercial lease terms indicate a move towards boosting housing supply and market flexibility in various local authorities.
- Abolishing planning committees may lead to increased consistency and transparency in planning decisions, but it could also bring about house price rises, a dilution of community benefits, and competition for available land.
- The Home Builders Federation suggests that politics often obstructs practical solutions to the UK's housing crisis, making the case for separating land ownership from politics stronger in the context of recent political decisions.
