A new House of Lords Built Environment Committee report calls for government action on planning, SMEs and barriers to housebuilding for the elderly to address the UK’s housing crisis. Committee chair Baroness Neville-Rolfe DBE CMG discusses its conclusions
Too many people currently live in expensive, unsuitable and poor-quality homes and housing supply needs to be increased now to tackle the housing crisis. This was the conclusion of the report by my committee, the Lords Built Environment Committee.
Our report urges the government to address the many barriers that exist to building new homes of all tenures. The government’s target of 300,000 new homes per year will only be met if government takes action to remove the barriers for housebuilding.
There is not one silver bullet, but we have identified a series of measures that together could remove barriers to housebuilding and provide a housing dividend.
SME housebuilders
We were particularly concerned by the collapse of the role of SMEs in the housebuilding industry. In 1988, SME housebuilders built 39% of new homes; by 2020 this had dropped to 10%. This is bad for competition, quality and diversity in the market. We call for SMEs to be supported by reducing planning risk, making more small sites available, and increasing access to finance.
We heard calls from both planners and developers that uncertainty and delays to planning reforms have had a “chilling effect” on housebuilding and created uncertainty. Our report calls on the government to set out its strategy for the planning system. This should include clear proposals on local plans, infrastructure funding and land availability. These changes should be for the long term.
With fewer than half of councils having an up-to-date local plan, our current system is not as plan-led as it is meant to be. The barriers to plan making must be addressed and we support the government’s proposals to get all authorities to make local plans within 30 months of any new legislation. Local plans can be very political and require public engagement so they must be provided in a common, simple and accessible format.
Spending on planning has fallen by 14.6% since 2010, causing delays, issues with recruitment and staff shortages in many authorities. Any new planning system will only work if local planning authorities have the resources and staff to implement it. My committee recommends that local planning authorities should be enabled to recover more of their costs through planning fees to relieve the crisis in funding.
In our report, we also suggest a proposal for building more homes on land around railway stations and raise concerns about delays caused by the way Section 106 agreements operate in practice, including the impact on SME housebuilders.
Skills shortages are on a worrying scale
Skills shortages account for over a third of construction vacancies and almost half of all manufacturing and skilled trades vacancies. Apprenticeship starts have fallen over 25% since the introduction of the levy – we recommend that the levy is reformed. We also need upskilling for the green skills needed to address climate change.
We also call for more homes for the elderly: by 2032 the number of people over 80 is estimated to rise to 5m, up from 3.2m today; by 2050, one in four people in the UK will be over 65. As the population ages, we will need more specialist and mainstream homes suitable for older people.
Social housing
Many tenants who would previously have been in social housing are now living in expensive private rented accommodation, with their rents subsidised by housing benefit, which is costing the Exchequer around £23.4bn per year. We suggest that a transition to spending more on the social housing stock could provide better value for money and help meet the most critical needs. The Right to Buy and Help to Buy schemes can also be improved.
We are facing a national housing crisis, which is only exacerbated by uncertainty and a lack of clear policy direction. This is a long list, which shows why the situation is so difficult. But we need to act on most – preferably all – of these issues very soon if the situation is to get better.
Baroness Neville-Rolfe DBE CMG
Chair
House of Lords Built Environment Committee
