HQN Blog: A tale of two housing reviews

We could be on course for radical changes in the way that new homes are planned, designed and built, if two Conservative knights get their way.

Within days of Sir Oliver Letwin delivering the final report of his independent review of build-out rates to the Treasury, housing secretary James Brokenshire was appointing Sir Roger Scruton to chair a new commission to improve the design of new developments.

Sir Oliver, the former cabinet minister and MP for West Dorset, was writing his report amid growing support from housing organisations and Tory modernisers for radical land reform.

Reformers argue that much more of the uplift in the value of land that comes with planning permission for housing should be captured for affordable housing and infrastructure, rather than going straight into the pockets of landowners. In particular, they want the repeal of legislation guaranteeing landowners the ‘hope value’ that comes from planning permission.

If all that sounds radical, it would only bring this country into line with what happens elsewhere in Europe and what used to happen here when the post-war new towns were first developed.

However, the report only goes some of the way to addressing those arguments. Instead, Sir Oliver zeroes in on slow build-out rates on large sites (developments of 1,500 homes that currently take an average of more than 15 years to finish) and argues that the key reason for this is the fact that developers only build homes as fast as they can sell them in the local market at a required rate of profit.

To tackle this problem, he recommends a new planning regime for large sites that would require housebuilders to commit to a greater diversity of tenures and types of home.

Local authorities would get new powers to designate particular areas in their local plans as large sites subject to the new regime and develop master plans or design codes via their own or privately financed development companies.

On top of that, Letwin recommends viability guidance that would cap residual land values at around ten times their existing use value (compared to up to 275 times under the current system).

The new regime would apply from 2021 but in the meantime Sir Oliver recommends that housebuilders should be ‘incentivised’ to use it for existing sites with planning permission by making this a condition of access to government funding. However, with billions of pounds a year at stake, much of it currently filling the pockets of Conservative supporters, it remains to be seen how much of the review will survive contact with politics.

Housebuilders and landowners argue the new system will be cumbersome and bureaucratic and could even mean fewer new homes. While they would say that, the Budget background documents show that the chancellor has already watered down one key recommendation. ‘In order to minimise uncertainty for housebuilders’ existing large sites with outline planning permission will not be forced to diversify to get access to Help to Buy.

Add the fact that the Treasury will not formally respond to the Letwin Review until February and there is plenty more time for lobbying by housebuilders and other interested parties.

The launch of the Building Better, Building Beautiful Commission comes seven years after the Eric Pickles bonfire of the quangos saw the Commission for Architecture and the Built Environment (CABE) merged into the Design Council. CABE regularly criticised the design quality of new housing developments to the irritation of major housebuilders.

Quite what the new commission will have to say remains to be seen. The new organisation is closely based on a report published in June by the think tank Policy Exchange and written jointly by Conservative philosopher Sir Roger Scruton and former Labour mayor of Newham Sir Robin Wales. (So much so that the MHCLG press release uses an illustration grabbed from the report and Sir Roger will be the unpaid chair of the commission).

The report argues that traditional beauty in design is the way to overcome nimbyism. It recommends design and style guides produced in consultation with local residents, accelerated planning permission for designs that locals approve and new ‘Special Areas of Residential Character’ to ensure that new developments are in keeping with the existing look and style.

Backing comes from the top. Theresa May is a fan and it is said that she brandishes copies of the report at meetings on housing and design, while Brokenshire is one of her closest allies.

If they can spare any time from Brexit that is!

On the downside, this all sounds like a rehash of the endless debate between advocates of traditional and modern architecture, and one that could give well-heeled local residents as many reasons to reject new schemes as to support then.

On the upside, anything that could mean greater public acceptance of new homes is worth a look and this report does not look remotely as damaging for housing as the rest of Policy Exchange’s output.

However, the launch of the commission has been overshadowed by controversy over past comments by Sir Roger Scruton about homosexuality, Jewish people and date rape, with his supporters claiming that this amounts to a left-wing witch-hunt.

All of which makes the man styled in the media as the government’s ‘housing tsar’ sound a bit like the housing version of Toby Young, the journalist-provocateur who was eventually forced to resign from the Office for Students after an outcry over his views.

The terms of reference for the new commission include advocating ‘for beauty in the built environment’, developing ideas to help renew high streets and inform the planning and design of new settlements and for the identification of appropriate land for housing and informing the work of MHCLG and other government departments. Sir Roger is set to appoint four commissioners late November, present an interim report to ministers by July 2019 and deliver his final report to the housing secretary by December 2019.

If that sounds familiar, it is exactly the same process that Sir Oliver Letwin’s review went through. Only time will tell if either of them make much difference.

By Jules Birch