Toby Lloyd, head of policy at housing charity Shelter, suggests a five point plan to help deliver more homes to the British market, which were outlined in a recent article published by the Financial Times.
A restricted land supply means that housing supply is also restricted. This is rational market behaviour by developers, rather than, as is often perceived, some perverse reaction. A shortage of land – and therefore houses – means every house a developer builds, will be sold, he argues; so there’s no incentive to innovate, the market is hard for new entrants to get into, and every sale should generate profit.
He notes that the last few years have seen a concentration of the market, as larger firms come to dominate, and they like to build large, lumpy sites out. The combination of all these factors means, he warns, the market “is not delivering the homes we need”.
Lloyd’s five suggestions are:
Establish New Homes Zones, specifically set aside to help promote lower cost development and reduce land speculation
Start charging council tax as soon as planning permission is granted – to encourage construction to be carried out fast
Publish ownership details of sites, along with option agreements – enabling greater market transparency
Increase public investment in housing, using a national housing bank similar to that used in Holland
Allow councils to borrow more, to invest in affordable homes
“Ultimately we should be aiming not only to boost supply, but to transform our housing supply system once and for all,” says Lloyd. “With the right intervention and investment we think we can launch house building into a new era, in which competition can function properly, builders can build more homes – and consumers can finally start getting a better deal.”
Will these work? Do comment.
The article is in full on the FT blog.