Comment

Housing and residential development is critical to the UK’s infrastructure mix

Antony Oliver

For all the excitement created by Mark Carney the Bank of England governor and his assertion this week that the housing market presented a the major risk to UK’s continued economic recovery it is worth reiterating the point that he also made during his interview with Sky News about just what he can actually do about it. 

"We're not going to build a single house at the Bank of England and we can't influence that," he said, underlining the fact that the underlying problem in the UK market is not one of available post banking collapse finance but simply rooted in the continued failure to build enough homes to meet demand. 

The bold fact is that socially and economically the UK needs to build more houses. And it needs to start now.

"The housing challenge must be embraced as a critical part of the nation’s infrastructure. Its development must be pursued with the same passion and cross party central government intent and single mindedness that we (gratefully) see behind transport, energy and water projects."

The figures have been discussed for many years now. To have any chance of meeting the growing demand for housing across the nation we need to build 200,000 perhaps 240,000 homes a year. Latest figures suggest that, while there has been an upturn as the market heats and house builders release long awaited land, we are still barely half way to this target.

Certainly London and the South East has a critical problem brewing. As London Mayor Boris Johnson never tires of reminding the nation, increasing birth rates and economic migration will see the capital's population soar 37% to over 11M in the next three decades. 

With projects like HS2 set to stimulate growth and spread the nation’s wealth beyond the south east the story of rising population and housing need will be the same, if perhaps to a lesser extent, across the UK.

And despite the claims by government ministers to the contrary, local planning restrictions do continue to make it very difficult for schemes to progress at the rate required or with the commercial returns needed by developers. 

Sure, it was great to hear Chancellor George Osborne trumpeting the Ebbsfleet Garden City development in his most recent Budget statement. But it is a scheme that, let’s not forget, has been on the planning stocks for a decade. More needs to happen to turn this and other similar projects (do you remember Labour’s Eco-Towns) -  into reality.

And it is similarly good that changes have been made to planning rules such as the introduction last year of permitted development rights for commercial to residential (see analysis) and for retail to residential conversions. 

Making the most of the building stock that already exists and stimulating urban regeneration as businesses and building uses change is an obvious way to meet the housing demand. 

But what is clear is that our locally based planning system, with all its local and vested interest, is still placing too many barriers in the way of development. For every relaxation there appears to be a bunch of new risks ready to soak up time and cost.

This must change. The housing challenge must be embraced as a critical part of the nation’s infrastructure. Its development must be pursued with the same passion and cross party central government intent and single mindedness that we (gratefully) see behind transport, energy and water projects.

Antony Oliver is the editor of Infrastructure Intelligence

If you would like to contact Antony Oliver about this, or any other story, please email antony.oliver@infrastructure-intelligence.com.