Last Thursday, Sir Michael Lyons published his
much-awaited report on how to increase the supply of new homes
to 200,000 a year by the end of the next Parliament. With 171 pages
and 39 recommendations it is a comprehensive and serious
contribution to better understanding of why the English housing
market is failing and what might be done about it which repays
reading by anyone concerned about housing, not just those aiming to
shape Labour Party policy.
ARCH readers will be disappointed to find that it does not take
up our demand for the abolition of HRA debt caps, but it would be a
mistake to conclude that there is little of value in it for
stock-owning councils. On the contrary, there is far to much
to be fitted in to a single blog and I plan to spread my
consideration of the report over several instalments in the coming
Why, asks the report, are we now building only around half the
number of new homes each year that the nation needs, and half as
many as we were building 50 years ago? Two major causes are
The first, as Kate Barker showed a decade ago, is that not
enough land is being made available for new homes. Not, the report
is clear, because of those who sit on planning committees, or those
who advise them, but because not enough is being done to
address the public's concern that houses are often built in the
wrong place, for the wrong people, and without adequate attention
to the pressures created for the existing infrastructure.
Councils will find this diagnosis a refreshing departure from the
instinctive reaction of governments, developers and media to blame
planners and planning procedures.
The second major obstacle to expanding housing supply is the
diminished capacity of the housebuilding industry. Fifty
years ago, the public and private sectors together built over three
hundred thousand homes a year. Private housebuilders, large
and small, played their part, together with councils, many of which
built through their own direct labour organisations.
Construction DLOs are now close to extinction, but the
composition of private sector supply has also changed. In the 1980s
there were on average 10,000 active small builders (building 500
units or fewer) responsible for 57% of output. Now their
number has shrunk to less than 3000 and they produce less than 30
per cent of new homes.
The volume housebuilders now responsible for nearly three
quarters of all new homes have a business model that limits supply
to what can be easily sold. Part of the solution to the
housing shortage, argues the report, must be to find ways to
encourage new entrants to the housebuilding industry, to grow
capacity and end the dominance of the volume housebuilders.
Councils can and should, argues Lyons, return to a significant
role in commissioning and building social housing, both by making
use of the capacity of HRAs, and through the New Homes Corporations
mentioned at the Labour Party Conference a few weeks ago. But
the implications for councils go much wider - they point to wider
public and community involvement in the planning and delivery of
new or expanded settlements - and not just in the narrow sense of
land-use planning or development control. And they also point
to the need for councils to look at growing local construction
capacity as an economic development priority.
These are all issues to which I will return in future blogs.