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5 key proposals for housing in the Conservative Party manifesto

18 May saw the launch of the Conservative Party’s manifesto for the upcoming General Election. The housing crisis and housing supply feature prominently in its 88 pages.

This post identifies the five central themes of Conservative policy for the housing market and development industry, and what that might mean for you.

While the focus in the post is on the Conservative Party manifesto, we’ve covered the Labour Party manifesto here. The Liberal Democrat manifesto is covered in this post.

The overall objective

The headline of the housing section of the manifesto is “Homes for All,” a clear indication of the party’s aspiration.

The main objective is also clear: to “fix the dysfunctional housing market so that housing is more affordable.”

There are a number of proposals which the Conservative’s hope will combine to ensure that they deliver, covering the following five key areas.

1. Build more homes

The manifesto states that the key to fixing the housing crisis “is to build enough homes to meet demand” and that this will involve sustainable development “in every village, town and city across our country.”

It tries to quantify that by reaffirming the target to deliver a million new homes between 2015 and 2020, with a promise to build a further 500,000 new homes by 2022.

There is also a commitment to build 160,000 homes on government land.

The remaining four themes set out how that target will be achieved.

2. Reform the planning system and development process

The Conservatives intend to deliver the reforms they’ve already proposed in the Housing White Paper. The White Paper aims to free up more land for new homes in the right places, speed up development rates by encouraging modern methods of construction and give councils power to intervene where developers “do not act on their planning permissions”. (Not that there is any evidence of “land banking” actually taking place, as this post explains).

3. Diversify who builds the homes, with a bigger role for councils

The task of achieving the levels of development proposed doesn’t just fall to the private development industry. There will be an attempt to diversify who builds homes, including an increased role for local authorities. Councils will be encouraged to build through Council Housing Deals, but only those authorities who will build high-quality, sustainable and integrated communities.

There is a recognition that councils might not be set up to achieve that currently, and the Conservatives therefore commit to work with them to improve their capability and capacity to deliver, including providing “significant low-cost capital funding.”

Housing Associations will also be given greater flexibility to increase their housing stock.

4. The location and design of new homes

The manifesto includes a lengthy section emphasising the importance of quality homes and quality developments. It includes a specific commitment to support high-quality, high-density housing like mansion blocks, mews houses and terraced streets.

Despite the desire to increase levels of development, there is an explicit commitment to maintain the protection of the Green Belt.

A further aim is to re-balance the delivery of housing across the country rather than focusing development in the South East. This is intended to tie in with the proposed industrial strategy to encourage economic growth in the regions.

5. The importance of infrastructure

There is a recognition that increasing housing supply isn’t simply about building the homes themselves. The manifesto has a strong focus on the delivery of new infrastructure to support that housing growth. Specific proposals include:

  • A new £23billion National Productivity Investment Fund which will target spending on areas critical for productivity, including housing.
  • Investing in roads to “fix pinch points and open up opportunities for new housing and local growth.”
  • Launching new rail services to places which are currently poorly served or will host major new housing projects.
  • Working to capture the increase in land value created when developments take place to reinvest in local infrastructure, essential services and further housing.

Some other points

Scattered throughout the manifesto are a number of other policies that will affect various part of the housing market. These include:

  • New fixed-term social houses, which will be sold privately after 10 to 15 years with an automatic Right to Buy.
  • Reform of Compulsory Purchase Orders to make them easier and less expensive for councils to use.
  • Reforming and modernising the home-buying process so it is more efficient and less costly.
  • A crack down on unfair practices in relation to leasehold properties, such as escalating ground rents.
  • Reviewing energy efficiency requirements for new homes.

What impact will all these proposals have?

Despite the amount of ink used on housing issues, the manifesto is light on detailed policies and is more focused on over-arching aspiration. That means there is little that most people would disagree with.

The devil, as always, will be in the detail. But history doesn’t paint an optimistic picture of the chances of success.

The commitment to deliver 1,000,000 new homes by 2020, for example, was first made in 2015 and already looks like it will be missed. In any event, that only represents about 80% of the homes that will be needed over that period.

The manifesto does seem to propose some fairly fundamental changes in how housing will be delivered though and, for once, those changes aren’t solely about tinkering with the planning system.

For example, efforts to involve more organisations in building new homes, and especially councils, should have a positive effect on housing supply. In the past, levels of home building have only regularly exceeded 200,000 homes per year when local authorities have been delivering significant numbers of new homes themselves.

If it helps councils understand the complexities of development a little better too, that could have further benefits for the planning system.

The recognition of the critical role the government can play in delivering new infrastructure to open up land for development is also likely to be welcomed. It may even go some way to off-setting objections from local residents who are often concerned about the capacity of their local areas to absorb new development.

What might have a less positive influence on supply is the aim to capture a share of the increase in land value that occurs when a development takes place. The last effort at that was Community Infrastructure Levy (‘CIL’), a flat charge per square metre of development set by councils to reflect local circumstances.

CIL has proved incredibly difficult to implement, with numerous changes to the regulations to try to make it work. Many councils have even chosen not to introduce a CIL charge at all because of concerns that it will make development unviable. However noble the aim, it is extremely difficult to find the balance between capturing enough of the increase in land value to deliver infrastructure but not so much that the supply of development sites falls.

How this could impact on you

Whether or not the Conservatives win the election, and however successful these polices are in boosting the supply of housing, the manifesto devotes a considerable amount of space to the housing crisis. That shows the importance politicians are placing on the need to increase rates of development.

The focus on the housing crisis is building on efforts to increase supply dating back a number of years. Those efforts mean that some sites which might not have had development potential in the past could now be suitable for new homes.

The Strategic Land Group specialises in delivering homes on sites of all types – greenfield, brownfield and even Green Belt.

We work with land owners to deliver planning permission on their behalf at our cost and risk. Our return is a share of the value of the site once it is sold. If we don’t succeed, it doesn’t cost you anything.

If you have a site that you think might benefit from our approach, get in touch with us today for a free, no obligation assessment.

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