Residential Construction and Housing Supply

Lord Palmer of Childs Hill Excerpts

Wednesday 24th April 2019 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, first, I thank the Minister for initiating the debate and setting out the Government’s plans in quite great detail. We need to be clear about the overriding philosophy of modern methods of construction. Is it our aim to build more homes quickly, more cheaply or to a high or higher standard? Is our aim to get people off the streets and out of temporary accommodation? I suggest that not everyone will or even wants to own their own home. As the noble Lord, Lord Best, said, many need to rent.

I see the reality in my family, with three adult grandchildren renting because they cannot see themselves able to purchase. There is a need for more rented accommodation and, as the noble Lord, Lord Best, rightly said, we need more social housing. It is good to come straight after him so I can cut all that bit out of my speech, because he dealt with so many aspects of how to increase social housing. Perhaps I could add that the construction of social rent homes has plummeted by 80% in the past 10 years. Shelter is calling for 3.1 million new such homes in the next 20 years. That equals 155,000 per annum, whereas only 6,463 were built in 2017-18.

My question to the Minister and to the House is: will the use of revolutionary technology build better-quality homes at record speed? Modular housebuilding is growing in the UK, but very slowly: 15,000 per annum are now factory built. Obviously, that of the noble Lord, Lord Patten, has not been built—but 15,000 have apparently been built elsewhere.

I was, however, perplexed to read that one developer using factory build reckons the lifespan of those properties to be 75 years. History has shown in my borough, the London Borough of Barnet, that estates of prefabs from the 1940s are not only still in use but highly valued by their occupants. I have also seen the use of factory builds for student accommodation at Middlesex University. I was impressed, when I saw this a few years ago, at how the modular units fitted together, so that each bathroom was a corner triangle which fitted back to back with the neighbouring units, thus simplifying the delivery of utilities. It was mind-boggling to see how simply having triangles of bathrooms fitting together could solve so many builders’ problems. Will the new methods produce more homes more quickly and to a high quality?

How can the Government force the larger developers not to sit on land banks and to release units only at a steady flow so as not to depress prices and profits? This is the problem at the heart of our housing crisis, which I last highlighted in this Chamber two and a half years ago. Have attitudes changed since then? A report in the past few days showed that housebuilders still sit on enough land to build well over 800,000 homes. The number of plots in the nine largest builders’ land banks has risen since our debate in November 2016, in which I spoke, to about 838,000. Those are plots on which they could build but have not built—and this is despite government reviews and policies.

In 2016 I pointed out in this Chamber that on a large site with planning permission, builders will rarely sell more than 150 units per annum. This enables them to sell at a price to delight their shareholders by not depressing the price of the properties they are selling. Is there truth in the assertion that the fault lies with the local authorities—as I have heard said this evening? In the local authority planning system it can take years to get planning permission, given the time it takes to hear applications and appeals. Is that the problem? If that is the case, what are the Government doing to rectify it? There is a problem with overall planning and with specific planning permissions? Or does the slowness in obtaining planning consent suit the large developers, which are happy to sit on land going up in value and are keeping high the value of developed homes? If this is the case, what are the Government doing to break the logjam?

Will modern forms of construction also provide more homes for rent and purchase, and will the Minister comment on some suggestions for government action, such as support for the UK’s modern methods of construction supply chain and funding for innovation, using research and development tax credits to encourage innovation and trial of new products and technologies? The noble Baroness, Lady Warwick, who is not in her place, mentioned standardisation. Various companies are building under the new methods of factory build, but are they consistent with each other? Is there standardisation? Otherwise, we will end up with systems that do not interlock, as with so many things in this country.

Will the new system develop new skills of factory building rather than bricks and mortar on site? Will it improve design quality? We are not looking for mass building at cheaper cost—“build ‘em high”, in the old Tesco format. We are talking about improving design quality. Will the Minister tell us whether the Government will encourage post-occupancy evaluation, to let the occupants tell us whether it is working? Finally—looking at the time—could the Government support a review to subdivide large sites to create more variety in the same area?