Sheffield’s Chief Executive on the housing crisis

Sheffield’s Chief Executive on the housing crisis

Sheffield’s Chief Executive, John Mothersole gives an excellent and realistic outline of the challenges facing cities as the supply of housing land shrinks, forcing down new-build completions and pushing up prices for buyers and tenants alike.

This will be a difficult issue to move forward with the inherent conflict between the need to build and the natural tendency we all have towards NIMBYism on our doorstep. Politics (or at least the need for politicians to keep voters voting for them) constantly gets in the way and while we all understand that our young people are finding it harder than ever to set up home, we don’t like the impact that means to our neighbourhood if it’s one that will see new homes.

Planning policy needs reform, but in the meantime we’ll need a shift towards reordering sectors of cities so that zones reflect the local needs today rather than the historic grain. We tend to stay within our comfort zones, only thinking of what an area is or has been, whereas we have got to remove the familiarity from the decision making process to see what somewhere can be soon.

That’s not a clear nod towards for brownfield development, since without the extensive and unpopular use of compulsory purchase powers the difficulties of site assembly will prolong matters by decades. Whilst initially attractive as a soundbite, brownfield development brings lots of problems, both technical and social, and most brownfield sites have a direct impact on more people than even a rural development does.

Alternatively, selective greenfield consents which complement adjacent brownfield sites can bring together usefully sized development plots that can deliver new homes over the next two to five years. These sites exist both on the edges of town and in the very heart of the urban grain, but it takes market expertise and a canny eye to see the potential that extends beyond an easily identifiable site. Council planners don’t tend to be very good at this due to the many constraints that they have to work under, but there are others out there who are expert at knitting together these schemes and they need an open mind and support from Town Halls.

With shortfall of hundreds of thousands of homes per year being built we really can’t afford to wait until community sensibility catches up. It’s impossible to pickle a community in a moment in time (and it’s a fallacy to imagine that even the prettiest village has existed forever) so the load needs to be shared. In doing so, it’s vital that people are involved and engaged in the process so that they clearly understand the issues and can be a part of the decision making process.

Multi-agency approach is vital so long as the overseers (especially planning committees) take on an enabling function rather than their traditional and control blocking functions. If we can achieve that we can provide decent and affordable homes for everyone.

Does Vince Cable really want to put up interest rates?

Does Vince Cable really want to put up interest rates?

Once again house prices are in the news, but this time it’s because the Business Secretary Vince Cable is talking about raising interest rates to help keep them under control.

Cable was speaking primarily about the overheating in the London and south-east housing market, introducing the spectre of London becoming a city populated by wealthy foreigners working in high-paying jobs.

Sadly this is another example of the London centric view that policy-making seems to be adopting increasingly at the moment. While it is true to say that London is attractive to many wealthy overseas buyers, the one thing that is self-evident is that house prices are not a problem to those people. Increasing interest rates will have the most on anyone apart from who is already struggling or in marginal position when it comes to their monthly mortgage repayments. Cash buyers and those with plenty to spend don’t inhabit this part of the market.

The other self-evident fact is that it is a problem of London and the south-east. The implications of the Bank of England raising interest rates go far beyond house prices for the rich and famous in London. The help to buy scheme introduced to assist in providing deposits for purchases up to £300,000 has been a runaway success and it’s now made victims of its success by inflating house prices across the country.

Straightforward supply and demand economics is what is driving as prices up. While our developers build less than half of the required number of houses the problem is not going to go away, no matter what happens to interest rates. Until planning and development policies relieve restrictions on building the new family homes that are in the greatest demand, the prices of those houses will continue to rise by more than the rate of inflation.

Vince cable may not want to put up house prices but there’s little point in espousing on interest rate ideas unless it’s on the table or it’s an elaborate precursor to some other measure. In the past he’s been a keen proponent of land and property taxes based purely on the value, in other words, carpetbagging.  While this may seem a politically expedient and to some extent a populist move, it puts the needs of government receipts above the needs of business and industry to create wealth and reinvest in their product and customers. It will be the small customer (first-time buyers, young families, retirees) who pay for any government property value grab, which will do nothing to provide the quarter million new homes a year needed to prevent market busting house price rises.