Let's ditch the red tape to help smaller developers build for the future
Wednesday, 22 January 2014 - Peter Andrew
The Government has had much to say about the housing market in recent times, but last week it was the Opposition’s turn to talk as shadow housing minister Emma Reynolds outlined Labour’s vision for the best way to get Britain building.
Ed Miliband has pledged that 200,000 new homes a year will be built under a Labour government by 2020, and Miss Reynolds believes big changes are required to deliver on this promise – including making it easier for small developers to build more homes, compelling local authorities to bring forward more smaller sites for development and investing significantly in new social housing.
It's certainly true that there needs to be investment in affordable housing and Miss Reynolds is also dead right when it comes to opening up more opportunities for smaller construction firms. That might seem strange coming from one of Britain’s biggest volume housebuilders – after all, these companies are our competitors in the strictest sense of the word – but the reality is that we need to build more houses as a nation and large developers aren't going to build all of them.
Small housebuilders offer different products on smaller sites and we don't really see them as 'the competition' because they're simply not equipped to build on the scale that we do. We need each other because if the housing market is to be truly sustainable and the industry is to deliver the numbers we’re talking about, there needs to be all sizes of builders working together.
Unfortunately, however, the planning system as it stands doesn’t particularly favour the smaller developer and it’s my view that there needs to be a shake-up to remove some of the bureaucratic barriers that are standing in their way. Currently, there’s any number of hoops to jump through in order to achieve planning permission, and while larger housebuilders have the finance and resources to cope with the process and its associated costs, it’s an absolute minefield for your average smaller outfit or one man band.
We need to slim down and speed up the planning process so that it’s much less onerous and costly for small developers, perhaps even returning to the days when outline planning permission was about simply approving the principle of development on a site with all matters reserved – effectively just agreeing a red line on a map. Achieving outline approval is becoming more and more complicated these days and the effect of this is to discourage those with limited resources from submitting applications because the risk often outweighs the potential reward. By simplifying this process and reserving the more complex details for a later stage, small builders will have much more of an incentive to invest in new developments.
It's clear that both sides of Parliament have their own ideas on how to boost housebuilding in the wake of the recession. The Government is approaching the issue from a more pragmatic perspective by looking at ways to boost supply, while the Opposition is taking a more philosophical view and examining why certain aspects of the market aren’t working. Both are talking sense in their own way – but we need to cut through some of the red tape before all this talk can translate to action.