There has been plenty of gloom of late about the impending squeeze on UK living standards. One of the biggest strains on household finances, however, has been building up for decades. Britain’s persistent failure to build enough homes in the right places has steadily pushed up house prices — to the point where rising housing costs have all but wiped out income gains for the bottom half of earners since 2002.
Sajid Javid, the communities secretary, has set out his blueprint for tackling the problem. His proposals are big on detail — they even address the protection of great crested newts — but they are about incremental change and offer no radical solutions. Nonetheless, his approach is sensible and a welcome change from the more ideological path followed by David Cameron’s government.
In particular, he has moved away from the fixation on home ownership, putting an equal emphasis on measures to spur building and improve conditions in the private rental market. He also appears willing to at least countenance a bigger role for the public and quasi public sector in areas where private developers appear unlikely to deliver what is needed.
The proposals will push local councils to produce an honest assessment of how many homes are needed and clarify what land is available for development. They will be encouraged to make the most of brownfield and surplus public land, to redevelop rundown estates, build on smaller sites and approve higher density developments.
Housebuilders will face tougher penalties, and possibly compulsory purchase orders, if they fail to build on land they own after planning permission has been granted. But there is also a recognition that the business model of many commercial developers simply does not suit housebuilding on the scale that is required, or on the small urban sites the government wants to see used to best effect.
It will be difficult to swiftly reduce reliance on the biggest housebuilders. But Mr Javid’s ambition of supporting smaller builders, attracting institutional investment in building for the rented sector and boosting the role of housing associations is worthwhile.
There is, needless to say, little new public money available to support the strategy, although Mr Javid has confirmed modest funding to support the infrastructure needed to act as a catalyst for new developments. Given the £9bn paid last year in housing benefit to private landlords, it would have been good to see more discussion of the potential for public money to be better spent on investment in social housing. There is also a failure to recognise some self-inflicted problems: in particular the fact that plans to restrict migration from the EU after Brexit will exacerbate the skills shortages that already delay projects in the south-east.
Critics will deplore the decision to leave greenbelt land untouched and the failure to consider more fundamental changes to the taxation of land and home ownership. But these would never have been the natural impulses of a Conservative government.
Despite the lack of bold, transformative policies, this strategy contains measures that should help those local authorities that are keen to accelerate housebuilding to do so. There are also new tools to exert pressure on local authorities that try to evade their responsibilities and keep new development to a minimum.
The test of Theresa May’s resolve will lie in implementation. It remains to be seen whether she will be prepared to force Conservative-led councils in the leafy shires to put her government’s new policies into effect.