The need for affordable housing in the UK has never been deeper.
With more than 95,000 households currently living in temporary accommodation, 8% more than last year, and 1.16 million households sitting on social housing waiting lists, there is a critical need for more affordable housing to be built in the UK.
Let’s not beat around the bush. This is a crippling housing crisis. The question is, can supply possibly meet demand?
Here are three of the restrictions holding back the development of affordable housing.
Discretionary Planning
The UK’s planning permission system is a divisive topic. Developers point at planning permission regulations as the reason they cannot deliver housing. The LGA responds by pointing out that there are over a million unbuilt homes that have planning permission.
The problem, many say, lies in the discretionary element of planning permission. It means land with planning permission is worth drastically more than land without it. This means that developers are incentivised to buy land, get planning permission for it, then sell it on at a higher cost, impeding the building of affordable housing.
The current planning system disconnects the local supply of homes from the demand. The suburbs and areas where homes are in demand never make it to the planning stage because developers know the cost of acquiring land, attempting to get permission, and failing.
Land Banking
As suggested, more than a million homes have planning permission but are yet unbuilt. This has led some to accuse developers of buying land and selling it on for a profit several years later when it has increased in value. In the meantime, the land is sat empty.
But a report compiled in 2012, found that 45% of houses with planning permission weren’t built because the owners weren’t developers. Instead, they were owner-occupiers, historic landowners, the government and investment funds.
Where ‘banking’ does occur, usually it’s because planning permission comes with a long list of conditions that need meeting. It takes time for that work to happen in the background. Similarly, a new development requires an increase in infrastructure. In these cases, developers need to acquire land in readiness to build once the infrastructure is in place.
The Green Belt
The green belt remains a popular policy amongst the general population. It protects large areas of the countryside and prevents urban sprawl. In principle, it’s great for the environment. It protects development in Areas of Outstanding Natural Beauty and Ancient Woodlands.
However, some argue that the green belt policy is unsustainable in its current form. Over the decades since its introduction in 1938, the green belt has expanded to cover 13 per cent of England. In context, buildings cover only 2.3 per cent of England’s land.
Critics are calling for green belt reform, saying it is too restrictive. Some have asked for the opening of areas around train stations, or 45 minutes away from major city centres. This could help the building of 1.6 million to 2.1 million homes and would ease the spiralling prices in suburbs. Opening up green belt land would inevitably help to create more affordable housing.
New planning shake up
Last year the Government announced proposals for reform to the planning system. The reform could be hugely impactful. The proposal removes the discretionary aspect of planning permission, replacing it with a zonal system. Planning permission would then be awarded automatically if proposals meet certain criteria.
Dividing land into areas with the status “growth” “renewal” or “protected” could speed up the build of housing developments. It will also reduce the chance of reduction to the size of developments and hold ups by local resident objections, as it did in the Mais House case.
Alongside this, there was also the proposal of a new “first homes” scheme. This would give a 30% discount for local people, key workers and first-time buyers. The discount would last in perpetuity, ensuring future buyers would also benefit.
The new proposals may be controversial for some, but they could have a huge impact on increasing the affordable housing stock in some of the most sought after areas of the country.