Residential Construction and Housing Supply

Lord Borwick Excerpts

Wednesday 24th April 2019 Lords Chamber

[Lord Borwick (Con)]

My Lords, I first declare my interests, as noted in the register, as a house developer with sites in Bicester, Scotland and Sussex. I am also a trustee of a charity for the education of deaf children and of other charities involved with disabilities.

Modern methods of construction, as considered in our excellent Science and Technology Committee report last year, should include making houses more suitable for people with disabilities. The Government have shown great progress over the last six months on the matter. Accessibility is covered in Part M in the Building Regulations; there is of course more than one level of accessibility, and I am told that developments in London tend to carry the highest level. I am not sure of the geographic distribution of disabled people, but, as disability is so strongly correlated with poverty, I doubt that they are concentrated in London. However, I am sure of the distribution of people who may become disabled in the future—it is all of us, everywhere. We had better get this sorted out before it happens.

Some small changes will make a big difference for those with disabilities, making houses truly usable. Part of the subject of this debate is to build houses in a sustainable way, whatever “sustainable” means. Perhaps other noble Lords may cover environmental concerns when discussing sustainability, but it should also simply mean that the house can be used by anyone in the long term. A house may have a lifespan of about 100 years. The house may be sold every four or five years. The chances of no users of that house—including friends and relatives of the owners—having a disability are surely very slim. Those chances are reducing as society ages.

Housebuilders quite rightly want to build for the person who is likely first to buy that house—the customer. For many sites, this is predominantly young couples, many of whom are expecting a child or will likely be so in the not too distant future. That can have knock-on effects, of course. At a site I was developing, the landlord of the local pub was not so optimistic about the new development bringing in a flood of new customers—he told me, “Half the customers are pregnant, and that is not good for the sale of beer”.

I made an application in the early 2000s for a site in Runnymede, then and now in the constituency of my right honourable friend the Chancellor, and I had intended to make every unit accessible—both the commercial houses and the social houses. They were to be built to lifetime homes standards—invented, I think, by the noble Lord, Lord Best, or his organisation —and I was told that this would be the first purely commercial development to that standard; hitherto, it had been used only for social housing. Connoisseurs will detect the subtle hand of the late great Sir Bert Massie in persuading me that undertaking this task voluntarily would enable him to argue that it was reasonable for everyone to do it. From my point of view, if it brought forward the development of the site and the planning permission by several years, the cost was unimportant.

I was told by professionals that it was a bad idea. Disabled people are less likely to be wealthy, so why would I make every house fit for that purpose? I was told I was going to be building a ghetto for disabled people. But my plan was much more sustainable. Buyers may not be disabled now, but they may be much less mobile in the future. In any case, we all spend time in a wheelchair, though it may be called a baby buggy when we are small—we will be lucky if it is only at the beginning of our lives that we need wheels.

Boosting the housing supply by sufficient numbers simply will not happen as long as we maintain a system of central planning. Central plans have never worked well, whether for tractor production in the Soviet Union or a plan-led system for houses. Only the market, not the Government, has the information needed. If we are to have plans, make them as local as possible—as we are doing—but do not believe they are going to work. The Soviet Union failed to run five-year plans for tractors, but we ask councils to plan for housing up to 25 years ahead.

The only solution to the housing crisis is to relax planning laws and to grant more planning permissions. We are making some progress in that direction. We did not plan our way into the housing shortage, so why should we be able to plan our way out? So grant more permissions with a high level of accessibility built in. Say to the developer, “If you want a quick permission, be the exemplar”.

It is understandable why people may be against granting more permissions, particularly those who will be affected by more houses being built which block their view. Housebuilding planning is particularly strange, as the neighbour has a binary choice—object, or do not object. There is no middle ground, but there could be if ownership of the benefits was shared by local people, not by “the community”. People who live next door to a development could be given the opportunity to invest and receive a share in the development, for instance. That would remove the binary choice, because they would say, “I do not like the development, but at least I will make a profit out of it”. Given my earlier points about building houses sustainably so that they accommodate disabled people, I believe the current system of highly restrictive planning laws puts the apparent needs of councils against the very real needs of disabled people. Is it really more important that we have public art than accessibility?

We know that the costs of local plans are borne by developers. A developer pays corporation tax, Sections 106 and 278 and CIL costs, and the cost of providing 40% social housing. But there are two forms of tax—those costs and delays. We must be careful not to overtax. The argument goes, “There is a shortage of houses”, and the answer seems to be that we must tax the only people that produce them. The biggest cost for a developer is the cost of the land and the delay in planning. Every time there is a delay, the time-based fees of professional advisers go up. That is the reason why the small builders and developers have almost disappeared. The money spent on fees is a big speculative risk.

Talking of costs, I have often wondered whether councils might view planning applications differently if they were faced with the cost of housing benefit. The lack of housing drives up rents, which makes them unaffordable to so many people whose only option is to turn to the state for support—a council delays planning permissions, and central government picks up the cost of housing benefit. What if councils had to pick up the bill for higher housing benefit because of decisions they make at planning meetings? It is worth thinking about. Housing benefit is being wrapped into universal credit, but if that were localised, would we see councils start to grant more planning permissions?

We have a localised system designed to encourage more housebuilding—the new homes bonus paid by the Treasury to councils. But it has some problems. Why is the payment made over four annual instalments? That seems to me to cancel out the idea that this is a “bonus” payment for granting more permissions. Perhaps finding a way for local authorities to bear the cost of restrictive planning, or to reap the benefits of good planning, might be more effective.