There is a lot said about the UK housing crisis, and it is generally accepted that there is a serious lack of housing across the country, most notably in London. The cause of this housing crisis comes down to a lack of supply going back to the 1970s, (see page 12 of this report), and all political quarters accept the need to build more housing.
It is a shame that they think it is only through the government that this housing can be built when a much simpler, cheaper and more straight forward solution is at hand – allow a free market in land and property development.
For many people, this at first seems far too radical – surely there needs to be some regulations governing development, otherwise it would be chaos? My response would be that chaos is what we already have.
For example, on one of the last planning committees I sat on as a councillor, there was a very large building on a high road that was left empty for many years whilst several applications were made to try and find an application that everyone would be happy with – everyone in this case being NIMBYs, the planning department and the councillors. As far as the people who actually owned the building, and the people who would have had housing to live in once the location had been developed were concerned, no one seemed to care.
Eventually a plan to build about 60 housing units was agreed, but not before S106 contributions had been agreed, totalling approximately £300,000 (including £8000 to pay the Council to monitor the S106 obligations) as well as 10 units given over to social housing, all creating costs for the developers. Costs that would ultimately be added to the already inflated house prices and would have to be paid by the end consumer who would finally end up living there.
The planning free alternative, the ‘chaotic’ alternative, would have been an empty property going up for sale; a developer purchasing it and then building however many properties they wanted – without being told things like the bricks were the wrong colour for the local area – and then those properties going on the market. All in a fraction of the time.
One could argue that there are considerations that need to be taken into account for such a large development, specifically, the impact of so many people moving in to the area on local services, something which at present S106 money supposedly rectifies. Firstly, these new residents will be council tax payers, and whatever services people think they get from their local authority would be easily funded through this.
Secondly, the local area would not have such a hard time to deal with a large influx of residents if there were no licensing restrictions preventing new businesses from opening up to meet the new demand. And regarding social housing, with a plentiful supply of private housing, the need for social housing would diminish with the reduced housing costs that would accompany a rapid increase in supply.
There have also been people who have made the argument to me that such a free for all in development would only serve the interests of greedy developers, and the example discussed above is surely proof of that? The fact is, it is the present system that benefits developers – they can afford to sit on a piece of land for half a decade (sometimes longer) waiting for approval, knowing that during that time the value of their property will have increased significantly. It is also the case that the large sums of S106 money they will have to pay is to them quite affordable, and is in practice a legalised form of bribery to entice local authorities to approve.
Besides, it is the greed of developers that we need to harness in order to solve the housing crisis – they want to make money, and the best way for them to do that is to develop. The quicker they can develop, the more the housing supply increases, which will have the happy side effect of reducing housing costs. In short, greedy developers will pay, with their own money, to solve the housing crisis. The alternative would be local authorities using your money to try and do this, incredibly inefficiently.
Far from inviting chaos, the total abolition of planning controls would allow housing to be built quickly and where it is needed, and to a high standard. It would end the bureaucratic nightmare that is the current system, would take decision making out of the hands of local authorities and councillors – who have their own interests when making the decisions they make – and allow private property owners to do what they want with their own property. More importantly, it would mean that ‘generation rent’ would no longer have to spend most of their income on housing, which would have immediate benefits for the economy, and long term benefits for them as they might actually be able to do things such as save for a pension.
The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty