Homes: Existing Communities

Lord Best Excerpts

Thursday 12th December 2024 Grand Committee

[Lord Best (CB)]

My Lords, I thank the noble Lord, Lord Wolfson of Aspley Guise, for his very stimulating speech and for initiating this debate. I want to pursue the question of who is going to deliver the quality and quantity of the homes we need, whether that is exactly 1.5 million over five years or any other target. Is it likely that the current system, which involves the vast majority of new homes being built by a handful of so-called volume housebuilders, will produce what is really needed, at the right quality, in the right locations, with the engagement of the surrounding communities?

The current system depends upon private developers bringing forward their own propositions for the market they believe to be most profitable. They will build out at the speed that suits them without having to reduce their prices. Moreover, having paid eye-watering sums for the land, as the noble Lord, Lord Wolfson, noted, developers frequently argue that they cannot achieve their yardstick profit of 20% unless they reduce the contributions they previously promised in cash or kind.

In the Letwin review of 2018, an alternative model was proposed, that of development corporations created by local authorities, but at arm’s length, which could acquire the land at a price that reflects the reality that obligations to the wider community are not negotiable. Quality place-making—the green spaces, the schools, doctors’ surgeries, sustainable drainage and the rest—would all be spelled out in a masterplan. Individual sites can be parcelled out to, yes, the major housebuilders, but also to the SME builders, housing associations, providers of student accommodation, older people’s housing and more. Then, instead of the development dragging on for decades, the build-out rate would be hugely accelerated by the mix of uses all being constructed at the same time. The previous Government’s Levelling-up and Regeneration Act 2023 paved the way for the creation of the development corporations that could act in this way, perhaps based on combined authorities and combined county authorities.

Use of compulsory purchase powers to buy sites where values cannot be agreed represents an integral part of the equation. Some have argued that this requires further legislation because, since the Land Compensation Act 1961, speculative “hope value”—the unfettered market price devoid of any obligations—can be used to justify a huge price tag. Others maintain that a valuation that fully reflects the public-good ingredients can now be used. Can the Minister shed any light on the current legal position in respect of CPO powers for land acquisition?

The opening up of grey-belt opportunities presents a special chance for private, but not for profit and publicly accountable, development corporations to step in and undertake high-quality development without the current dependency on the volume housebuilder. Will the Minister comment on the idea of support for the setting-up of new development corporations, perhaps through Homes England start-up grants? Let us take back control of housebuilding.