The government consulted on proposed changes to the planning system over the summer and is now analysing the responses. We expect to know the outcome early in the new year.
There seem to be two aims: first, to increase the scale of housebuilding to stimulate growth in the economy and so increase the tax take to help deal with the enormous debt that the government inherited; and second, to make housing more accessible to more people – a key priority for many younger voters.
Wokingham Borough Council’s response to the consultation argued that the government’s ambitions are unlikely to be realized if it sticks to its proposals, which include substantial increases in housing targets for the southeast.
The government, in our view, seriously underestimates the constraints to growth at the scale and pace that ministers desire.
Besides shortages of suitable land (nearly all the previously developed land has already been used), there are good reasons to doubt whether the construction industry can rapidly scale up. Since Brexit, the speedy mobilization of labour has been very difficult. Building materials are already in short supply, and likely to become more difficult to acquire when many different councils are granting larger numbers of planning permissions simultaneously to meet demanding government housing targets.
Labour and materials shortages will undoubtedly put upward pressure on house prices, which undermines the government’s second objective – to make housing more affordable to more people.
We believe that ministers need to consider whether simply building more houses in an area like ours is the right way to solve the housing crisis.
In Wokingham Borough we have seen how that plays out, with the price of new houses being well above what most local people can afford.
The laws of supply and demand might suggest that building more homes will reduce prices, but in our area the opposite has happened. Decades of significant housebuilding have been accompanied by rising, not falling, prices.
We are so close to London that new homes in the borough are often bought by people moving out of the capital – a long-term trend that has intensified since the pandemic. Meanwhile, housing need within the existing community often remains unmet.
So, what should the government do?
First, give councils greater ability to deliver Affordable Housing schemes that meet genuine local need, especially social-rental homes. In our area, nearly half of those who want a home of their own are thwarted by high purchase prices or high private rents.
Second, be truly radical and adopt a national strategy for housebuilding.
There are many areas of the country crying out for more investment, including new housing. A national strategy would take investment and housing to those areas that need them most and not direct unsustainably large numbers of new homes to the already overcrowded southeast.
All governments aspire to distribute investment and opportunity across the country more evenly, but then, paradoxically, go for the easy option of funnelling new housebuilding near London.
It’s time for a different approach.
Stephen Conway is the leader of Wokingham Borough Council
