Is the Housing Crisis in Crisis?

Given the current cost of living crisis through inflation (the CPI rose by 10.1% in the 12 months to January 2023), increasing interest rates (the Bank of England predict that the base rate will sit at least at 4.25 per cent by the end of 2023), rising construction costs and pending revisions to the National Planning Policy Framework (NPPF) that could see housing targets abandoned; we invited a select group of experts within the residential property sector to help us find out; is the housing crisis in crisis?

Immediately a resounding YES was the answer. However, to test that theory our enthusiastic and insightful debate got stuck into lots of detail around the political, economic, and social construct of the issues which are currently challenging our country and how we are housed.

Firstly, the political. The end of consultation on proposed revisions to the NPPF coincided with our event, but the changes were very much seen as political manoeuvring with the run up to a general election in 2024 being in the government’s sights. A key component of these changes is the re-phrasing of mandatory housebuilding targets to “advisory” and we have already seen many local authorities across the south-east delay or abandon their local plans, enabling local authorities in “difficult” or constrained areas to continue to kick the proverbial can of housing numbers down the road.

Despite this, however, it was felt that house building targets were already woefully short of where they need to be, citing Centre for Cities February 2023 publication The Housebuilding Crisis which reports that the introduction of the Town & Country Planning Act in 1947 steadily reduced the growth in housebuilding to 1.2 per cent per annum by 2019, having been at 1.9 percent between 1856 and 1939. Our current target of 300,000 new homes per year will not clear this half century’s backlog for at least another half century.  The article further states that a figure of 442,000 homes per year are required to bring England on par with the average European country over 25 years, or 654,000 per year to close the gap in ten. Turning mandatory targets into advisory figures will do nothing to redress the balance, but might win a few votes in the home counties.

We acknowledged that our political system is not set up to properly tackle this shortfall, with short-term views preventing long-term resolution. The Localism Act of 2011 has gradually been chipping away at the ability to “think big” and has led to a decentralisation of the planning system, creating a lack of development outside of cities and the promotion of Neighbourhood Plans, which are felt to be “killing affordable housing” and facilitating NIMBYISM.

Key to any solution is taking a longer view, which will mean sidestepping party-political posturing and incentivising landowners into philanthropy. The government should reward those who have the capital and the land (but little social incentive) for helping resolve a crisis that is being felt most by those campaigners who are least able to facilitate change. The private sector will not do this, as national housebuilders are not interested in legacy, and are driven by shareholder returns. An environment needs to be created whereby incentivised land release produces genuinely affordable, quality homes and communities.

Economically, there was plenty to discuss, mainly around the government’s promotion of homeownership as the singular desirable objective. Firstly, this is simply unaffordable to so many, with the average house costing more than 10 times the average salary, pushing the age of first-time buyers into their late thirties and creating a generation of renters. But is this such a terrible thing? Before the introduction of right to buy, England had a flourishing controlled rental market, which is now open to exploitation with little security of tenancy, controlled by multiple landlords often without any interest in the places that they have invested in.

Alternative rental models such as Build to Rent might be the answer, although currently focused on high-rise apartment blocks in key city centres. We thought that there may be a potential model for family housing, possibly combined with shared-ownership as a staircasing mechanism between rental to ownership - which will have a much larger customer base following the removal of the help to buy scheme, and enable a greater security of tenancy.

However, the private sector has never accepted shared ownership, seeing it as a sub-prime product carrying the (unjustified) stigma of “social housing,” and thought of as only being for the “poor.” Compared to home ownership, renting is undesirable and not aspirational for many. This is vastly different in Europe. In Scandinavia there is security of tenure and controlled rent, with their egalitarian social construct and mindset being completely different to our market driven approach in the UK. This results in renting being a desirable and affordable choice.

Cultural and societal change is needed to be able to structure the changes we discussed, which is difficult when the proposed amendments to the NPPF incentivise the status quo and promote a levelling-up agenda that fails to promote the right homes in the right locations; or alternatively creates the right infrastructure to connect the “wrong locations.” Either of these scenarios must accept development and better educate or incentivise NIMBYS - who bemoan the loss of local shops and their village pub but are not prepared to accept additional housing and therefore the additional customer base required to make them viable businesses.

The generation gap is widening, and maybe, build to rent is the answer for Generation Z; a generation that actively indulges in experience over the accumulation of possessions, living their lives renting everything from music to clothing. Social media, and the way that their lives are communicated, pursued, and organised through it, creates power for that generation, as they are the guardians of this technology and understand how it can be used to redistribute resources, and the value that can be extracted.

Social media has the power to communicate the collective responsibility that is required to effect and demand change, and similarly technology is already in place providing new ways of working, consuming, and spending our leisure time. Change in our housing is likely to be next on the agenda and those that choose to ignore it, take the short-term view (including the government), or fail to cater to the needs and desires of this generation, will be dealing with a cohort who wield significant power with a belief that nothing much stands in their way.

And as the algorithms of AI gradually take over, maybe they will also be able to help confirm the NPPF’s definition of building beautiful and refusing ugliness, a subjective ideal that is fabulously well intended but sadly currently compromised by competitiveness. In a cost of living and housing crisis the lowest common denominator of quality is unfortunately settled by a race to the bottom.

Around the table were:

Roger Keeling of Zephyr Partnerships Ltd

Charlie Stevens of Sovereign Housing Association

Andrew Gullett of Helix

Rupert Reeves of Carter Jonas

Ed Brawn of BRAWN Landscape Architecture

Luke Challenger of Blackbox Planning

Jasmine Hounslow of iB Architects

Penny Dixon of iB Architects

Ian Blake of iB Architects

If this has piqued your interest and you would like to be a part of this debate or join us at our next round table, contact us at studio@ib-architects.co.uk or direct message via iB Architects Ltd