“For every home built 2014/5 £60,000 went to landowner”

Thomas Aubrey of the Centre for Progressive Policy:

“Our system favours landlords over communities. The PM must side with the many, not the few.

Theresa May is right. Britain’s housing market is broken and needs fixing. Homelessness and rough sleeping are rising and owner-occupation levels for the young have collapsed because homes have become unaffordable.

The average private rent in London accounts for more than a third of household income. The bill for housing benefit has risen eight-fold since the early 1980s after inflation is taken into account. House building has risen since the lows reached during the financial crisis of a decade ago but needs to almost double to hit the government’s target of 300,000 new homes a year by the middle of the next decade.

Yes, the housing market is broken all right and for the Conservatives, a party that sees itself as the party of the homeowner, it is a serious political headache.

A crisis has been brewing for decades – and left unattended the problem can only get worse. Britain has a rising population and the trend is for smaller households, both of which mean demand for housing will keep on rising. The weak growth figures for the first three months of 2018 will keep borrowing costs on hold for now but sooner or later the Bank of England will raise interest rates. That will make it still harder for people in their 20s to get a foot on the housing ladder.

Yet sketching out the problem is one thing. Coming up with solutions is trickier.

Replace a regressive council tax with a land value tax? Labour is thinking about a LVT but there is no chance the Conservatives will introduce what they have dubbed a “garden tax” that would hit millions.

How about giving some of the anonymous farmland in the green belt over to housing development? The thin end of a wedge that will result in the south-east being turned into one big urban sprawl.

Make prime residences eligible for capital gains tax? Are you kidding? Politicians know that Britain’s housing market is broken but mess with it at their peril.

The problem is so big, however, that changes have to come. London’s mayor, Sadiq Khan, wants to increase the supply of lower-cost homes in the capital, so under City Hall guidelines private development proposals where affordable units make up at least 35% of the total will be fast-tracked through the planning process. Under 35%, and developers can expect a much tougher time.
But as Daniel Bentley argues in a new pamphlet for the thinktank Civitas, the problem goes deeper than the planning system. Forcing councils to grant more planning permissions in high-demand areas doesn’t guarantee that the supply of new homes will markedly increase.

The reason for that, Bentley says, goes back to the 1961 Land Compensation Act passed by Harold Macmillan’s government. This enshrined in law the right of landowners, in the event of compulsory purchase, to be reimbursed not only for the value of their land as it stood but for its potential value if it were used for something else in the future.

A system so heavily weighted in favour of landowners had two consequences. First, it provided them with an incentive to wait, often for years, before selling their land for development because they would get a higher price. Second, house-builders had to recoup the costs of buying the land and did so by building more expensive properties that were drip-fed into the market to keep selling prices high.

If the aim is to build more affordable homes, this makes no sense. A site with planning permission for housing is worth more than a brownfield industrial site and 100 times more than agricultural land. Research by Thomas Aubrey of the Centre for Progressive Policy found that landowners made windfall profits of more than £9bn in 2014-15 on the sale of land. That meant for every home built that year, an average of £60,000 went to the landowner.

Bentley says the entitlement of landowners to this “hope value”, the prospect that it will be worth a lot more if used for something else, means public authorities are powerless to enforce development priorities that are in the interests of the community.

“This was not always the case. The new towns that were initiated before the 1961 act, and much of the local-authority output of the late 1940s and 1950s, was underpinned by a land values policy that meant landowners were compensated at values reflecting the existing use of the site,” he said.
“This meant land for new homes could be acquired at or close to its much lower agricultural or industrial use values. It also doused speculation and prevented the withholding of land.”

Reforming the 1961 act so that public-sector bodies can purchase land at less than its prospective residential use value makes sense because it would enable developers to get hold of land more cheaply and so build more affordable homes. Nor would it be an especially controversial move politically.

Judging by their 2017 manifestos, Labour and the Conservatives think the current system is weighted too heavily in favour of landowners, who see the value of their holdings increase not through their own efforts but through those of others.

Adam Smith and David Ricardo, darlings of the free-market right were critical of the “unearned increment” that landowners enjoyed. So was Henry George, who the left laud for coming up with the LVT.

May should seek bipartisan support for a rethink of the 1961 act. Sure, Conservative-supporting landowners would object but if the prime minister is to make good on her pledge to fix the housing market she has to side with the many not the few.”

https://www.theguardian.com/business/2018/apr/29/want-to-resolve-the-uks-housing-crisis-heres-how

“MPs and peers in call to ‘age-proof’ homes in rural areas”

“Rural England needs more homes that are suitable for an aging population, an all-party parliamentary group has said.

Following a nine-month inquiry, the All-Party Parliamentary Group on Housing and Care for Older People, today published a report calling on local planning authorities to ensure provision of new homes for older people.

The inquiry found that 50% of rural households would be over the age of 65 by 2039.

The APPG’s report said the Department for Environment, Food and Rural Affairs needed to play a key part in the integration of policies for housing, health and social care in rural areas for older people.

Other recommendations were directed at the Ministry of Housing, Communities and Local Government, suggesting all new homes be built to the Lifetime Homes standard of accessibility.

Inquiry chair Lord Best said: “For all the advantages of living in the countryside, life can be pretty miserable if your home is no longer right for you; if you can no longer manage the steps and stairs, if maintaining the property is costing too much, if keeping warm is a trial and your energy bill’s a nightmare, if you can no longer tend the once-beautiful garden.”

Best said that the APPG was concerned that older people would face “a huge challenge to their independence and wellbeing if their homes are no longer suitable.”

Izzi Seccombe, chair of the Local Government Association’s community wellbeing board, said: “Councils want to see a desperately needed residential revolution in older people’s housing.

“It’s essential that housing for older people enables them to live independently at home for longer, by including adaptations which enable them to get around easily and support them at home.

“If councils are given the right tools, we could trigger that residential revolution and deliver the homes our older residents need, but with an ageing population, the clock is ticking.”

MHCLG has been contacted for comment.”

https://www.publicfinance.co.uk/news/2018/04/mps-and-peers-call-age-proof-homes-rural-areas

River Cottage HQ: controversial extension to be decided tomorrow

Daily Mail says yes:
http://www.dailymail.co.uk/news/article-5655473/Hugh-Fearnley-Whittingstalls-River-Cottage-HQ-set-expanded.html

Natural England seems not so sure and there seem to be unresolved drainage issues:
http://eastdevon.gov.uk/media/2449194/010518combineddmcagenda.pdf
(page 107 onwards)

But all should be well as Oliver Letwin MP has written in support.

To be decided tomorrow

Links to the property industry? On the planning committee? No problem!

Does the reporter REALLY think this is only a London problem?

https://www.theguardian.com/society/2018/apr/29/nearly-100-london-councillors-have-links-to-property-industry?CMP=Share_iOSApp_Other

Alas not, as we have proved in East Devon:

https://www.telegraph.co.uk/news/politics/9920971/If-I-cant-get-planning-nobody-will-says-Devon-councillor-and-planning-consultant.html

Case law will impact on developers who say they can’t (now) afford affordable housing

Parkhurst Road Limited v Secretary of State for Housing Communities and Local Government & London Borough of Islington. Case No: CO/3528/2017, in the High Court of Justice, Queen’s Bench Division, Planning Court, 27 April 2018.

“A High Court judge has backed Islington Council in a long-standing battle between the council and developer First Base (Parkhurst Road Limited), who refused to provide affordable homes on a former Territorial Army site in line with the council’s planning rules.

The developer bought the site on Parkhurst Road in 2013 and has attempted to secure planning permission for a residential development with little or no affordable housing, ignoring the long-standing planning requirements on the provision of affordable homes set by the council.

An initial planning application was submitted in 2013 by the developer who were assisted by Gerald Eve as viability consultants. The council refused planning permission for this development twice on the grounds of not providing enough affordable housing, as well as other matters.

The case centres around the viability assessment of development and, in particular, how the price of land should be determined in planning, which is a tool increasingly used by developers and their viability consultants in recent years, to avoid complying with councils’ planning requirements on affordable housing.

Two lengthy public inquiries were held, both of which were won by Islington Council. Each time the low level of affordable housing provided on the scheme was being justified by the developer on factors such as the purchase price paid for the site, and land transactions of other schemes. Following the second public inquiry held in early 2017, an Independent Planning Inspector appointed by the Secretary of State, upheld Islington’s refusal of planning permission in his decision of 19 June 2017.

The developer then mounted a legal challenge against the Planning Inspector’s decision at the High Court. The Planning Inspector’s decision was defended in court jointly by Islington’s legal team and the lawyers representing the Ministry of Housing Communities and Local Government (MHCLG).

Normally, the role of the courts in planning disputes is very limited and restricted to legal technicalities only. However, in this case the Judge Justice Mr David Holgate allowed a fairly detailed examination of planning issues and the development viability evidence in particular.

Today (Friday, 27 April) he dismissed the legal challenge on all three grounds put forward by the developer, and concluded that he was satisfied with the Planning Inspector’s decision to dismiss the developer’s appeal and uphold the council’s decision to refuse the planning application.

Responding to the judgement, an Islington Council spokesperson said:

“We are delighted by the High Court judgement. This decision reinforces Islington Council’s long standing position that developers should abide by the councils’ planning guidelines – rather than overpaying for land and then trying to bypass our affordable housing requirements.

“There is a shortage of good quality, genuinely affordable housing in Islington and a significant unmet housing need. The council is doing everything it can to address this, because we believe that everyone should have somewhere to live that is affordable, decent and secure – and developers must respect these important priorities when they purchase sites in Islington.”

In a highly unusual move, in a postscript to the judgment, Judge Mr Justice Holgate also recommended that the current, widely used, guidance on viability assessments by the Royal Institute of Chartered Surveyors (RICS) should be revised “in order to address any misunderstandings about market valuation concepts and techniques, the “circularity” issue and any other problems encountered in practice over the last 6 years, so as to help avoid protracted disputes of the kind we have seen in the present case and achieve more efficient decision-making.”

This is something that the council has been calling for over the last couple of years, due to serious concerns about how the RICS Financial Viability in Planning (2012) guidance note was being applied in practice.

Islington Council’s planning guidance on Development Viability is very clear and specifically cautions developers against overpaying for land and using the purchase price as a justification for providing little or no affordable housing. This landmark judgment reinforces what Islington (and many other councils) have been arguing for years that affordable housing requirements cannot be bypassed by using the “dark art” of viability assessments to ignore planning policy requirements.”

http://www.islington.media/r/97837/high_court_backs_islington_in_a_landmark_planning_case_on

“RURAL RESIDENTS FACE SOCIAL CARE ‘LOTTERY'”

The government’s system of funding social care services is unsustainable and unfair for rural communities, the Rural Services Network has warned.

Service providers operating across rural areas face inequitable costs compared to their urban counterparts for both adult and child social care, said the network.

Rural council taxpayers also faced unfair costs, warned the network in response to an inquiry by MPs who are examining the long-term future of adult social care.

RSN chief executive Graham Biggs said: “Social care is a national issue but it is in crisis.

He added: “While continuing to be delivered locally with flexibility for councils to respond to local circumstances and priorities, it should be 100% funded by central government to provide an adequate core service level for all residents nationally – irrespective of where people live.

“Council tax is an unsuitable taxation vehicle for demand responsive services and means rural residents face a postcode lottery when it comes to social care provision.”

Mr Biggs said council tax should only be used to fund social care if a given local authority decided extra money was needed to boost services above a core level locally.

It should not be used to fund the core, national, service, he added.

Mr Biggs said: “It costs substantially more to provide social care in rural areas than it does in larger towns and cities – and there is higher demand for services in rural areas.

“As a statutory duty, services have to be prioritised and other budgets – such as rural transport support, for example – are being cut significantly as a consequence.”

This was because older people make up a higher proportion of the population in rural areas than they do in urban areas, said Mr Biggs.

At the same time, the twin challenge of isolation and distance made it harder and more expensive to deliver services to dispersed rural populations.

Such costs inevitably and unfairly penalised rural councils – and were compounded by issues such as poor economies of scale and poorer external markets for delivery.

Mr Biggs said: “A future formulae to fund social care services must fully reflect the different costs of delivery imposed by both geography and population.”

http://www.rsnonline.org.uk/rural-residents-face-social-care-lottery