New Housing Supply

David Davis Excerpts

Monday 5th June 2023 Commons Chamber

[Mr David Davis (Haltemprice and Howden) (Con)]

I beg to move,

That this House has considered the matter of delivering new housing supply.

One of the critical issues facing our constituents today is housing. Whether it is young people struggling to get on the property ladder, tenants having to put up with high rents and substandard housing, or families who cannot afford an adequately sized home, across the political divide we are all acutely aware of the growing crisis we face. Seven out of 10 voters think that there is a national housing crisis. Housing is a top issue for millennials. After the first and second world wars, there were campaigns for homes “fit for heroes.” What we need now is a campaign for homes fit for a new generation.

It is worth pausing for a moment to reflect on why home ownership is so important. I think we all believe in the ideal of a property-owning democracy. MPs in every party will understand that buying your first home is a huge milestone in life. We all understand that having your own space and somewhere to call home is incredibly valuable. It gives people a stake in society and a sense that they control their own life. Ownership also provides much greater security than the rental market, which is especially difficult at the moment. It is not right that huge numbers of people, including families with young children, have to keep moving or are insecure and unable to properly put down roots anywhere. That is bad for all of us and undermines our collective sense of community.

House prices have reached unaffordable levels because, as is fairly evident, we have a housing shortage. The average home costs about £285,000. In London, where the picture is even more stark, the average cost is an enormous £523,000. Over the last 25 years, housing affordability has worsened in every single local authority across England, and younger people most acutely feel the impact of the crisis.

In my lifetime, the number of young families trying to buy a house has virtually halved. When I first bought a house, the average house cost three times the average income. Now it is between eight and nine times the average wage. In the last decade, over half of first-time buyers have had to rely on some kind of help from their parents. The increasing need to rely on the bank of mum and dad is widening the inequality gap and further eroding social mobility in the UK. The crisis is forcing those who cannot rely on well-off parents to fork out thousands of pounds more in rent, to stay at their family home for longer and to delay their plans to start a family.

Even those who can afford a home are getting less for their money. Since 1970, the average size of a living room in a new build property has declined by a total of 27%. The average floor space of homes has declined by almost 20% in that time. We need not only to build more houses but to build them better. Our constituents deserve and, rightly, expect both quantity and quality.

Obviously, housing is a matter of supply and demand. Let us deal with demand first. Since the mid-90s, the nation’s population has grown by between 9 million and 10 million, principally because of immigration. Governments of all persuasions—I am making this deliberately a non-party matter—have failed to build the homes required to meet that increased demand. The result has been a huge backlog in housing need—probably of 3 million or 4 million, although I have seen all sorts of estimates. Clearing that backlog and meeting new annual demand would require us to create several hundreds of thousands of homes every year for decades to come, which, again, all Governments have failed to do.

On the face of it, the answer is simple: build more houses. But with our planning system, that is far easier said than done. The real question is not whether to build, but where to build, and not just because demand is higher in some places than in others. All of us have run into vested interest groups who oppose new build estates. Often those groups can have legitimately held and valid concerns about overdevelopment, the impact on local amenities and infrastructure, or the concreting over of local countryside.

If we want to attack this problem properly, we should not see nimbys as irrational or selfish. Indeed, their feelings are entirely understandable. A home is probably the most significant investment that a family will ever make. So-called nimbys quite rightly want their children to grow up in a decent home in a good-quality neighbourhood. If someone has moved to a rural or semi-rural area, already facing stretched public services or congested roads, they will not wish to see their idyllic new home engulfed by rapid and substantial urban sprawl, or local infrastructure placed under unnecessary or additional stress.

[John Penrose (Weston-super-Mare) (Con)]

My right hon. Friend is making a powerful case and is absolutely right in the way he is laying out the problem and how people see it. Is he aware not just of nimbyism but of yimbyism—the “yes, in my backyard” movement? It says that many people are willing to accept densification, particularly in British towns, to see more investment in town centres and to breathe life back into those towns, both socially and economically. That goes with the grain of what people want and also cuts housing costs, both to rent and to buy.

[Mr Davis]

I agree entirely. It is slightly separate from the main thrust of my argument, but my hon. Friend is exactly right. One of the issues is quality of community, which is addressed directly by what he just said.

How do we get around the nimby problem in its conventional sense? I believe that a large part of the answer is garden towns and villages. It is not a new proposal but a tried and tested policy, albeit with some tweaks to deliver it in the 21st century. Indeed, my hon. Friend the Member for South Thanet (Craig Mackinlay) has spoken about it before, as have I, and there have been Policy Exchange think-tank papers on it. It is not that new, but it is worth resurrecting. In the 20th century, the garden city movement resulted in the creation of towns such as Letchworth and Welwyn Garden City, now populated by around 30,000 and 40,000 people in each case. Those new garden towns and cities were great successes. What is the measure of that? Nearly 3 million people live in the 32 towns created under the New Towns Acts 1946. Reviving these ideas will hold the key to solving much of the housing crisis.

[Bob Seely (Isle of Wight) (Con)]

I thank my right hon. Friend for a really fascinating speech and hope that the debate will be of equal quality. There is an issue with density. Garden cities are a fantastic idea, whether Hampstead garden suburb, Welwyn Garden City or the others, but we have some of the lowest density cities in the world. We are a small country with a high-density per-kilometre population compared with elsewhere in the world. How does he square that circle with the high-quality environment that he wants to see?

[Mr Davis]

Part of that fits in with what my hon. Friend the Member for Weston-super-Mare (John Penrose) said, but I will deal with the point about the high density of the population in a moment.

Let us talk about the politics of nimbyism. Today, in a village in my constituency, a small development of 100 homes would generate thousands of objections. That is inevitably what happens. A garden town could deliver tens of thousands of homes and, if put in the right place, would probably generate a few hundred objections. I will talk about how to minimise that, too. Such a scheme would be fruitless unless we can ensure that new developments generate the funding they need to become places where people actually want to live. That is key.

Part of the problem with the existing process is that a mass of potential funding for infrastructure can quickly disappear, captured not by the local community but by landowners and developers. As soon as a hectare of farming land gets planning permission, its value will shoot up roughly a hundredfold. That is the order of magnitude. It goes from £21,000 for the average hectare of agricultural land to an enormous average residential land value of £2.1 million per hectare—that is outside of London. However, the vast majority of that will go to the landowner and the developer. About 27% will be captured by the state, mostly by the Treasury—that is over and above the money brought in by section 106 agreements.

There is no guarantee that money will be spent locally. Indeed, there is almost a guarantee that it will not be spent locally—I am looking at my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), a former Treasury Minister, as I say that. This system starves local communities of funding that could pay for necessary infrastructure within the development, such as schools, roads, train stations, GPs and hospitals, fibre optics or cycle lanes—you name it—or even funding that could pay for larger and cheaper homes, which comes to the point about density. The result is piecemeal development around existing settlements that lacks the proper amenities to cope.

The solution lies with the example I have referred to already, set during the 20th century. The construction of new towns was centred around radical but effective legislation that allowed new town development corporations to buy large tracts of land at their existing use value. That meant that when buying up farmland for garden towns, the corporations paid the agricultural use price rather than the hope value, or hypothetical market price. I want to propose a slightly more sophisticated approach, because I do not really like expropriation—I am a Conservative, remember. We will have to have some sort of compulsory purchase, but there should be a proper compensation for that.

Consider an example of a 1,000 hectare garden town, a little smaller than Welwyn Garden City. Purchasing 1,000 hectares of land at agricultural value would cost £21 million, but as soon as it has planning permission the value would rise to £2.1 billion—remember that number. There is no change to the underlying land usefulness and no work undertaken—that is just a change of planning permission. But a Government-created garden town development corporation might pay the existing owners, let’s say, 10% of the development value. That is still £210 million, so we are now talking about a pretty rich farmer. That is ten times the existing use value and a profit for him of £190 million, but it still leaves £1.9 billion of uncaptured asset value. That £1.9 billion surplus can be used to invest in the town’s infrastructure, schools, medical centres, parks, pedestrian walkways, high-speed optical links, and road and rail connections.

[Sir Stephen Timms (East Ham) (Lab)]

I commend the right hon. Gentleman on securing the debate; he is making some very important points. Does he agree that part of the success of the new towns was around the provision of social housing and that there needs to be a substantial programme of that within the programme that he is setting out to the House this evening?

[Mr Davis]

Frankly, I see nothing difficult about that, because I am talking about creating communities that have been designed. When communities are designed, all sorts of social structures are created. I will come back to the detail in a minute, but I do not have a problem with anything that the right hon. Gentleman mentioned.

As I say, the design is done as a single entity. Unlike the chaotic marginal extensions and infills of current development, we can ensure the developments are well designed. We know how to build successful communities— we have plenty of evidence. We know how to design out crime. We know how to separate traffic from pedestrian ways and cycle-to-school routes. If we select locations properly, we can ensure links that facilitate getting to work, shopping and entertainment.

[Mark Pawsey (Rugby) (Con)]

I admire my right hon. Friend’s ambition in looking to achieve such large new towns. In my remarks, I will argue that we are probably better off looking at sustainable extensions to existing communities, although I admire his ambition. Does he not recognise that we have tried this with eco-towns, no more than 20 years ago? Not a single one succeeded. There was so much opposition that I fear his laudable aims will not be realised.

[Mr Davis]

Well, that is the rest of the argument. My aim is to create a well-designed town, which is attractive to live in. I looked around my own part of the world and I thought, “I can see where they would go.” I am not going to say it publicly as I do not want to change the land values, but I could certainly see that.

These developments would be built in areas of comparatively low population. They will not be on top of an existing town, as my hon. Friend describes, so they can, to a large extent, sidestep the nimby problem. Even in cases where there is a hamlet near to a proposed site, considering the size of the surplus, it could be used to buy out those who are objecting, with a small premium on the existing market price, a little bit of help with moving and the payment being tax free. That would minimise the nimby problem.

It is not as though we are short of space for these new developments. As my hon. Friend the Member for Isle of Wight (Bob Seely) said, we often hear that the UK is full or that further development risks damaging our beautiful countryside. I am afraid I do not agree with such arguments. My hon. Friend has been in a helicopter more times than I have, so he will know that if he flies from London to York or Hereford to York, or wherever he likes, if he looks out of the window he will see that unless passing over a major conurbation, it is like looking at a golf course. Only 8.7% of England is developed; in Scotland, it would be a tiny fraction.

[Bob Seely]

My right hon. Friend may find that that figure is disputed. When we look at motorway service stations and urban lighting, we see that urban sprawl means the number is significantly greater than 8.7%. That number represents a very narrow definition and there are people who would at least double it.

[Mr Davis]

Like all mathematicians, as I am, I always treat numbers carefully. My hon. Friend might note that I said, “Look out of the window of a helicopter.” If he does that, he will see what I am talking about—large amounts of free tracts of land. I am talking about not just any old land, but land near motorways, railway hubs or the old Beeching railway lines, if we wanted to rebuild some of those. There are a whole series of places where we could put people.

It is not just a numbers game either. As the right hon. Member for East Ham (Sir Stephen Timms) and others have said, new communities need to have character. They need to be attractive to all sorts of members of society. Garden villages and towns make that possible. I am not necessarily trying to introduce another policy aim, but instead of shoehorning new houses into any nook and cranny we can find in existing settlements, we can build good-quality, spacious homes in new developments.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

On that point, will my right hon. Friend give way?

[Mr Davis]

I have to stop there as I have nearly finished. We can build good-quality, spacious homes in new developments—well-designed homes in well-designed communities. Learning from previous development of garden villages and new towns, we can avoid past mistakes and build attractive, pleasant places that people will genuinely want to call home. In many ways, this is a matter of property rights. What we are aiming for is the best balance of affordability, ambition and respect for local residents of any mass house building proposal currently on the table. They are based on a proven model of success. Let’s get building.

[Madam Deputy Speaker (Dame Rosie Winterton)]

As colleagues will see, this is a very well subscribed debate. If we are to get everybody in, that requires speeches of seven minutes.

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[Mr David Davis]

The extraordinary importance of this issue is measured by the sheer number of people here, and not just the quantity but the quality. We have had ministerial experience, local government experience, professional experience and even APPG chair experience. I deliberately chose the subject “delivering new housing supply” so that it was as wide as possible, but it is notable that we have had complete unity on the aim of closing the gap in supply. We have had a massive multiplicity of ideas, all of which are necessary, frankly. If we are to deliver a proper property-owning democracy to the next generation, we have to use everything that we have heard today. I thank everybody for their contributions.

[Vicky Ford]

On a point of order, Madam Deputy Speaker. When I spoke earlier, I should perhaps have referred to my entry in the Register of Members’ Financial Interests, as I am an unpaid member of the board of the legendary Essex Cricket. I hope that Members will forgive me and that the record can be corrected.