“A land banking scandal is controlling the future of British housing”

“How often have you heard private developers and their allies say they can’t build more homes because planning rules have created a shortage of land?

Kate Andrews of the Institute for Economic Affairs (IEA) summed up this view in The Daily Telegraph, saying: “There is only one way to solve the housing crisis and bring down the extortionate cost of homes: liberalise the planning system and build more houses. A bold but pragmatic policy would be to release greenbelt land – just a small fraction of which would be enough to build the million homes needed to address supply.”

A million more homes? That’s a tantalising prospect. So is there any basis for her argument that the only way to solve this problem is to liberalise (or deregulate) planning?

A little digging into the latest financial reports of the top 10 housebuilders reveals a very different story. Between them, they have a staggering 632,785 building plots on their books, of which more than half have planning permission. At the same time, these 10 companies reported building a total of just 79,704 homes – which means they have, on average, eight-years’ worth of plots in their land banks at the current rate of construction.

Among the top 10, there is a wide variation. At the upper end, Berkeley and Taylor Wimpey are hoarding 15 and 13 years’ worth of land respectively. At the lower end, McCarthy & Stone and Bellway have land banks equivalent to four years’ current output. The difference is mainly in what are known as the ‘strategic’ land banks – reserves that have not yet gained planning permission. All ten have ample land with consent, ranging from three to five years’ worth of output.

The top 10 builders accounted for about half of the 159,510 homes completed by the private sector in 2017.

It is often the case that the stories an industry feeds to the media are at odds with the trading information individual companies give shareholders via regulated stock market announcements. A classic example of this is car insurance where the industry body complained of an “epidemic of fraud” while the major providers told the market that claims volumes were falling.

In the case of housing, the market reports of the top 10 builders are brimming with confidence about future trading. You might expect Bellway, for example, to be feeling the pinch from a supposedly burdensome planning system because of its smaller-than-average land bank. But its trading update in August said that it had detailed planning permission on all its 2019 building plots and had increased land acquisition by 12 per cent to an annual level 30 per cent higher than its output. “The land market remains favourable and continues to provide attractive opportunities,” the company said.

The top 10 builders accounted for about half of the 159,510 homes completed by the private sector in 2017. So, what about the other players? Information is patchy because many are private companies, but random checks on those that are publicly listed suggest that smaller housebuilders also hold enough land to keep them going for years.

And then there are the companies that combine building homes with developing sites to sell on to other builders. The latest trading update from Inland Homes, for example, said that in the first six months of this year it has built 357 units and sold 837 plots to other housebuilders but still has 6,808 in its land bank – nearly six times as many as it built on or sold.

The pattern is clear: across the private housebuilding sector big land banks are the norm. If the top 10 companies – equating to half the market – are hoarding 600,000-plus plots, it is safe to assume that well over a million plots are in the land banks of the sector as a whole. Far from needing greenbelt land, the builders already have enough plots to deliver a step-change.

But will they? The IEA believes ‘markets’ solve economic and social problems, but the last 30 years have shown that is certainly not the case with housebuilding. When Margaret Thatcher slashed funding for council housing in the 1980s, the idea was that the private sector would fill the gap. But it didn’t happen: while the number of homes built by councils slumped from 110,170 in 1978 to 1,740 in 1996, private sector output stayed at much the same level as it was under Labour in the 1970s. With housing association output also virtually unchanged, total housebuilding has halved from more than 300,000 annually under Jim Callaghan to an average of 154,000 since 2010.

This situation suits housebuilders nicely. Constrained supply has helped push up the average price of a new house by 38 per cent since 2010, against an average of 30 per cent for all houses. And booming prices have in turn generated record-breaking profits and dividends. Taylor Wimpey, for example, cleared a £52,947 profit on each of the 6,497 houses it sold (at an average price of £295,000) in the first six months of 2018 and was able to promise shareholders that it would pay out £600m in dividends in 2019, a 20 per cent increase on 2018.

The government has responded to growing anger about land banks by setting up a review under Tory MP Oliver Letwin to “explain” why the “build-out rate” on land with planning permission is so slow. Letwin’s interim report has already admitted that housebuilders complete homes at a pace “designed to protect their profits”. His final report is due in time for the Autumn Budget, but don’t expect anything radical: he has made clear that his recommendations won’t “impair” the housebuilders.

Labour, meanwhile, has published a wide-ranging green paper promising “the biggest council housebuilding programme for over 30 years” delivering more than 100,000 “genuinely affordable” homes annually. To achieve this, Labour would use existing public land, such as sites owned by the NHS and the Ministry of Defence, and set up a Sovereign Land Trust to work with local authorities in England to help them acquire land at lower prices. Taking inspiration from the 1945 Labour government, it would also legislate to create another generation of new towns and garden cities.

Labour’s policy would, in effect, draw a line under the Thatcher era by restoring to the public sector the proactive role it played in providing housing prior to the 1980s. In doing so, it would limit the scope for the big housebuilders to hoover up nearly all the available sites and hoard them in order to drive up prices and profits. As for planning, far from being the cause of the housing crisis, it would be a means of solving it.

Steve Howell is a journalist and author of Game Changer, the story of Labour’s 2017 election campaign.”

https://www.bigissue.com/latest/finance/a-land-banking-scandal-is-controlling-the-future-of-british-housing/

West Midlands mayor must travel in luxury to help the homeless

“A Tory mayor has sparked outrage after spending £500 of taxpayers’ cash on a chauffeur to drive him to a meeting on homelessness.

West Midlands mayor Andy Street splashed the “obscene” sum on the “exclusive” service to take him and an aide to Heathrow Airport and back home again.

In his manifesto when he ran to become mayor, Mr Street insisted: “I want to keep the costs of the mayor’s office as low as possible.”

The lavish spending by the former John Lewis boss can be exposed by The Mirror after his travel costs were revealed under freedom of information laws.

Birmingham Labour MP Steve McCabe branded the chauffeur-driven journey “obscene”, adding: “The money would have been better spent on night shelters and soup kitchens here in the West Midlands.”

The number of people forced to sleep rough in the West Midlands has shot up since 2010.

In November 2017, Mr Street visited Helsinki, Finland, in November 2017 to see an approach to tackling homelessness called Housing First.

Invoices obtained under freedom of information laws show the one-day trip cost £2,216.88.

The cost included a bill for £530.40 to transport an aide from Birmingham and Mr Street from Westminster to Terminal 3 at Heathrow Airport.

The chauffeur then drove the pair back from London to Birmingham at the end of the day.

The website of the chauffeur company, Chauffeured By Car, says it operates a “discreet, professional service” offering “first class luxury travel”.

It adds: “You can simply relax, leave all the worry about directions and traffic to us, and enjoy the journey. To Chauffeured By Car your journey is our passion and we are committed to providing you with a world-class service.”

Detailing the one-day Helsinki trip, documents from West Midlands Combined Authority say: “Housing and land use is a key priority for the West Midlands Combined Authority.

“As part of this one of the key areas the mayor is focusing on is homelessness and rough sleeping. This visit represented a fact finding and lessons learnt exercise on homelessness issues.”

Housing First is credited with making Finland the only European country to see a fall in long-term homelessness in recent years.

It has been successful at ending homelessness for at least eight out of 10 people in the scheme.

This is compared to hostel-based accommodation which has resulted in between 40% and 60% of users with complex needs leaving, or ejected, before their homelessness is resolved.

Mr Street claims the Helsinki trip helped him secure £9.6million in funding in May this year for the West Midlands to try to end the scandal of rough sleeping in the region.”

https://www.mirror.co.uk/news/politics/tory-mayor-splashes-500-taxpayers-13421748

EDDC’s current external auditors face probe over Patisserie Valerie

“The auditor of crisis-hit cafe chain Patisserie Valerie is facing an investigation by the industry watchdog.

Work by Grant Thornton has been called into question after bosses at Patisserie discovered a £28.8million black hole in the accounts, an unpaid tax bill and two ‘secret’ overdrafts totalling nearly £10million.

The auditor has worked for the company since 2006 and most recently signed off the books for the year to September 30, which said the balance sheet was strong and contained no borrowing.

… The Serious Fraud Office is already understood to be investigating and last night the Financial Reporting Council (FRC) confirmed it was reviewing the situation.

An FRC spokesman said: ‘We are looking into this matter carefully and will give full consideration to further action as more facts become available.’

… overdrafts with HSBC and Barclays had been run up by the company totalling £9.7million but directors only learned of them on Tuesday.

Likewise, around £28.8million that had previously been in the bank was unaccounted for and they learned tax officials were seeking to have the company wound up over unpaid bills.

… Grant Thornton declined to comment last night.”

… Cliff Weight, director of investor group Sharesoc, said: ‘I find it absolutely extraordinary that a company with revenues of £114million could ever lose track of £20million.’

https://www.thisismoney.co.uk/money/markets/article-6275371/Auditors-face-probe-Patisserie-Valerie-crisis-following-discovery-28-8m-black-hole.html

Second judicial review as a Development Management Committee defies first one!

Owl says: another “follow the money” situation?

“Folkestone & Hythe District Council faces its second judicial review in a year over a dispute concerning a proposed holiday park.

Local businessman Tim Steer was granted an application for the latest judicial review by Deputy High Court judge John Howell QC.

The case concerns an application to develop a 5.5 hectares site at Little Densole Farm, which is within the Kent Downs Area of Outstanding Natural Beauty (AONB) and locally designated as a special landscape area.

Planning and licensing committee members rejected officers’ advice and allowed the application last year, leading to Mr Steer successfully taking the council to judicial review.

When the application came before them again in July councillors again went against the officers’ recommendation and gave planing permission.

Judge Howell: “It is at least arguable that [the committee] failed to give any reasons for rejecting their officer’s appraisal that the development and associated landscaping proposed would not conserve the existing character of this part of the AONB…and that it would introduce alien and incongruous features that would permanently change the existing character of the landscape in that area.”

Mr Steer said: “Not for the first time the council will waste taxpayers’ money defending the blatantly questionable decisions of its planning and licensing committee, a committee which in my view is not fit for purpose and is unable to grasp or follow policy and legislation.

“It might appear to some that this particular committee simply follows its own agenda.”

He said the project would cause “permanent destruction” of the AONB.
Clive Goddard, chair of the planning and licensing committee, said: “Leave has been granted by the court to apply for judicial review in respect of Little Densole Farm. The council has nothing further to add and will be seeking legal advice.”

Folkestone & Hythe was known until last April as Shepway District Council.”

http://localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=36987%3Arow-over-holiday-park-sees-permission-granted-for-second-judicial-review&catid=63&Itemid=31

“Bus travel hits 12-year-low as prices rise and services are axed”

“… The latest figures from the show 1.2 billion local bus journeys were made across Britain between April and June – a 10 per cent decrease since the peak of 1.33 billion between July and September 2008.

The fall in journeys coincides with a 55 per cent hike in average fares over the past decade.

Demand for bus travel has not been this low since the beginning of 2006.

A recent CBT study found that funding for supported buses has almost halved in the last eight years, leaving many areas without public transport.

Local authority bus budgets in England and Wales were slashed by £20.5m last year – the eighth consecutive annual government cut.

“The falling number of passengers taking the bus is a consequence of continued cuts in funding to support services,” said Darren Shirley, CBT chief executive.

“Nationally and locally this is resulting in fewer services and higher fares. The statistics back up what our research has been showing for years: that buses are in crisis.”

Mr Shirley urged the government to use its upcoming budget to reverse the “trend of cutting support” for buses.

“They are vital for the economy and the environment but year-on-year, people – especially in rural areas – are losing their bus service, making it difficult to access jobs, education and other essential public services.”

https://www.independent.co.uk/news/uk/home-news/bus-travel-numbers-price-rise-public-transport-a8584211.html

“‘I leave the car at home’: how free buses are revolutionising one French city”

“… One month ago, Dunkirk – with a metropolitan population of 200,000 – became the largest city in Europe to offer free public transport. There are no trams, trolleybuses or local commuter trains, but the hop-on-hop-off buses are accessible and free – requiring no tickets, passes or cards – for all passengers, even visitors.

The scheme took its inspiration from Tallinn in Estonia, which in 2013 became the first European capital to offer a fare-free service on buses, trams and trolleybuses, but only to residents who are registered with the municipality. They pay €2 for a “green card”, after which all journeys are free. The city has reported an increase of 25,000 in the number of registered residents – the number previously stood at 416,000 – for which the local authorities receives €1,000 of each resident’s income tax every year.

Free urban transport is spreading. In his research Wojciech Keblowski, an expert on urban research at Brussels Free University, found in 2016 there were 107 fare-free public transport networks around the world: 67 in Europe (30 in France), 25 in North America, 11 in South America, 3 in Asia and one in Australia. Many are smaller than Dunkirk and offer free transit limited to certain times, routes and people.

In February this year, Germany announced it was planning to trial free public transport in five cities – including the former capital Bonn and industrial cities Essen and Mannheim. In June this was downgraded to a slashing of public transport fares to persuade people to ditch cars.

The largest in the world is in Changning , in China’s Hunan province, where free transit has been in operation since 2008. Passenger numbers reportedly jumped by 60% on the day it was introduced.

A study into free public transport by online journal Metropolitics found an increase in mobility among older and younger people, and an increased sense of freedom.

… Vergriete believes this is all part of an erroneous received dogma. He admits free public transport may not work everywhere, but says that, as well as being good for the environment, it is a social measure, a gesture of “solidarity” and promotes a more egalitarian redistribution of wealth than tax cuts.

“We have been pragmatic: we looked at the advantages of free transport and weighed them against the disadvantages and decided €7m is not a lot to pay for all the benefits. If I can pass one message to other mayors it’s to fight the dogma. Put the advantages and disadvantages on the table and consider it realistically. It may be that the financial cost is too great, but don’t underestimate the social advantages. You can’t put a price on mobility and social justice.”

https://www.theguardian.com/cities/2018/oct/15/i-leave-the-car-at-home-how-free-buses-are-revolutionising-one-french-city

“Near miss outside Cranbrook Education Campus prompts new road safety measures”

Owl says: the area around the campus looks an overgrown, desolate space and the campus itself does not seem to be wearing well; and one wonders how long the two cones will last:

“Dangerous parking on pavements outside Cranbrook Education Campus and a near-accident involving a child have prompted new safety measures.

Stone boulders are being put in place to stop vehicles driving on to the pavements.

The problems had been caused by parents parking on the pavements when picking up or dropping off their children.

The head teacher had written to parents asking them not to do it, but it was an incident at the end of a school day in mid-September that led to action being taken.

A car reversed off the pavement and narrowly missed a child.

No-one was hurt, but it led to the town council arranging a meeting with representatives of the school, the developers’ consortium, and a senior county highways officer.

It was agreed that the consortium would initially cone off the pavements, and then pay for the stone blocks to be installed in two places.

One is directly outside the driveway leading up to the campus building, the other alongside the entrance to the parking area behind the houses in Tillhouse Road, where cars have been driving up onto the pavement. It will not affect access to the parking area.

The two pedestrian crossings near the campus, both of which have worn-out road markings, will be repainted, and construction workers on the nearby development sites have been asked not to drive their vehicles near the campus at the start and end of the school day.

County Councillor Ray Bloxham said he was pleased to see the safety measures being put in place, but he thought they should not have been necessary.

“I’ve looked at what goes on there, and the people who’re complaining about the problem are the problem themselves,” he said. “They could at least stop 400 yards before they get to the school and let the children out there and walk. I actually saw people pulling up right outside the school, which is right on a road junction, on a bend, and stopping there and dropping their children off. Kids can walk 100 or 200 yards.

“I know people are rushed, they’ve got to get to work and all the rest of it, but if they just gave it a little bit more thought they’d solve their own problems really.”

http://www.midweekherald.co.uk/news/new-road-safety-measures-at-cranbrook-education-campus-1-5734784