Don’t let Starmer aid a Green Belt land grab

The top housebuilders have mounted a massive land grab over the last five years, taking their already sprawling land banks close to the million-plots mark.

In a modern-day echo of the Enclosures, when peasants were fenced out of fields they had toiled for generations, today’s land-grabbers are buying up huge swathes of Britain cheaply with no intention of building on it anytime soon. My latest analysis for Big Issue of the company reports of the eight leading housebuilders has found that the land they hold has soared to 918,823 plots, an increase of 43% on 2018.

Taylor Wimpey has the biggest bank with 223,745 plots, a rise of 16.5% on 2018 and enough to last 16 years at the rate it builds. Barratt and Persimmon have both increased their land-holdings by 71% to 172,174 and 168,461 plots respectively. And Bellway is no slouch: it now has 100,367 plots, a 161% increase on 2018. On average, the eight have enough land to last for more than eleven years, based on the rate they built homes in their last full trading year. With completions having dropped by around a third since interest rates started rising, they could keep going until 2040 without buying another plot.

For the housebuilders, this makes commercial sense. As Taylor Wimpey’s annual report says: “Our strategic pipeline (of land) is a competitive advantage in its own right, giving increased optionality and opportunities to protect value.” Translated, they mean that, by having an abundance of land, they can readily turn the tap up or down when it suits them in terms of prices and profits.

For politicians, however, this “optionality” is a nightmare. With the big eight accounting for nearly half of all private sector completions, they can make or break any attempt to tackle the housing crisis that relies primarily on their profit motive. This gives them huge leverage in policy-making and has led to both major parties pandering to their self-interested complaint that planning rules are onerous.

Most recently, the Government tried to use an amendment to its Levelling Up Bill to ditch an EU rule requiring builders to offset river pollution from their developments. Labour peers joined the Greens in voting to defeat that move in the House of Lords, but Keir Starmer has a planning ‘reform’ agenda of his own that could have even more far-reaching consequences. In his recent Labour conference speech, he said Labour would be “builders not blockers” and would “bulldoze through the planning system” to allow development on green belts to achieve a target of building 300,000 homes a year.

It seems Labour policy is now heavily influenced by the anti-planning lobby group, Centre for Cities, which published a report in February claiming that the 1947 Town and Country Planning Act is primarily to blame for restricting land for development and thus for Britain’s “four million missing homes”. The report argues that “Britain’s housing supply issues began in 1947”, not when Margaret Thatcher’s reforms virtually ended council house building in the 1980s. To support this contention, it says the housebuilding rate – how many homes were built relative to the housing stock – was 1.8 per cent annually from 1947 to 1979 compared to 2.3 per cent from 1920 to 1939.

However, as any statistician would say, correlation does not prove causation. An objective analysis would have to look at a range of factors, such as interest rates, the availability of mortgages, levels of public spending and the state of the economy generally. It would also spare us from date selection designed to prove a pre-determined point.

In treating 1947 to 1979 as one period, Centre for Cities has depressed the average to support its claim that planning is to blame. In fact, while planning rules were constant, housebuilding went through three distinct phases. Private sector completions recovered very slowly after the war and did not reach six figures annually until 1955. They then rose to a peak in 1968, when the private sector contributed 226,070 homes to a post-war record total of 425,830 completions. In the following years, that figure was never beaten as a series of economic crises and stop-go on public spending took their toll (though the 1970s annual average total of 314,307 was still above Starmer’s target). Had Centre for Cities chosen the stronger 1955 to 1969 phase, the average housebuilding rate would have been very close to its inter-war level.

Nevertheless, Centre for Cities proceeds from this flimsy premise – without mentioning that the major housebuilders are already sitting on more than eleven years’ supply – to call for the present planning system to be replaced by US-style zoning to give developers more “certainty”. On page 53 of its report, it reveals that this would mean allowing them to build 1.8 to 2.1m houses “around train stations in the green belt for suburban living”.

This was Centre for Cities’ goal as it lobbied delegates to this year’s party conferences, and the North of England Metro Mayors who spoke at its Labour events should be wary. The green belt being talked about here is the one around London. On past performance, housebuilders will happily snaffle up prime sites in the most lucrative locations and leave less profitable sites in their land banks. There is no guarantee that urbanising green belt will generate any overall increase in completions, and it would almost certainly lead to an even greater concentration of development in the South East. Meanwhile, anyone living in inner-city London taking a train to go for a country walk would find that, on reaching a station in the former green belt, they would have to trek through miles of suburban sprawl before reaching open woods and fields.

So, what is the answer? Land banking could be controlled by limiting the number of plots a builder can hold to a multiple of its current annual output, with any excess being subject to compulsory purchase. Of the top eight, three – Barratt, Persimmon and Bellway – had a supply of six years or less in 2018. If a limit of six years’ supply was applied to all the builders now, they would have to either double annual completions or sell the surplus 424,390 plots to local authorities at cost. If six years’ supply was good enough for some of them before the latest land grab, why not impose it on all of them now?

Tackling land banking is, however, only part of the solution. Experience since Thatcher tells us that it is unrealistic to expect the private sector to deliver a 300,000-plus target, regardless of how much land they have or how benign the economic circumstances are. Even in 2007, the best of the last 30 years, the housebuilders could only provide 195,870 new homes – nowhere near enough to make up for local authority completions averaging only 1,763 annually throughout those years.

Speaking at Labour’s conference, Angela Rayner said the party will not let developers “wriggle out of their responsibilities” to build more ‘affordable’ housing. This may have sounded plausible to the uninitiated, but ever-increasing land banks give housebuilders the upper hand and show they will develop sites only when the profits are good. When questioned on council housing, Rayner refused to pledge any funding or to end Right To Buy.

In the 1970s, despite the economic difficulties and public spending restraints, councils built an average of 134,231 houses annually. If that had happened over the last 30 years, the four million missing homes would now not only have been built but would be earning rent to pay for building more.

Thatcher’s reforms were an epic act of self harm, continued inexplicably by all her successors. We can’t undo the damage at a stroke, but it would be ludicrous to compound the mistake by persisting in relying on the private sector. If Labour genuinely wants to be “a builder not a blocker”, they should get tough with the real blockers who hoard land and empower local authorities to get on with building desperately needed homes.

Steve Howell

This is a longer version of a feature that appeared in Big Issue (16.10.23). Steve is the author of Game Changer, an insider’s account of Labour’s 2017 General Election campaign, and two novels: Over The Line and Collateral Damage.

 

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