Furious and frustrated: where has support for housebuilders gone?

The Tories pledged in 2019 to build 300,000 new homes a year by the mid-2020s. But construction chiefs are facing uncertainty, particularly after the removal of mandatory targets for councils, says Chris Blackhurst

Generally, new roads, schools, medical centres and so on are provided by the housebuilding industry (Getty/iStock)

One of those planning notices came through the door this week. It was for the nearby hospital site.

Let’s not get carried away – it’s not a full-on, all-singing NHS complex – but a mental health unit that is barely used. Still, it once was a proper isolation hospital and what remains occupies a decent amount of land, large for suburban southwest London.

What’s proposed is 106 apartments and three houses. Hmmm. How many of the homes would be social housing or affordable, it did not say. The last thing we need is more smart flats, each one doubtless with a car or two to join our already clogged roads. Not to mention the additional pressure on the sewage and household refuse systems and extra light and noise pollution. And if they have children, where will they go to school?

Then the leaflet mentioned there would be a new mental health clinic and a special needs school. We desperately need them. So suddenly, we’ve no objections to the scheme. In fact, we’re all for it.

This does, though, prompt the thought as to where we would be without our housebuilders. The government focuses its resources on building national projects; rarely funding smaller developments. It puts the onus for local infrastructure improvements on councils. But councils are impoverished, they have no spare money.

There are some nationwide initiatives and partnerships that provide infrastructure funding, but generally, new roads, schools, medical centres and so on are provided by housebuilders as their quid pro quo for being allowed to build their homes and make their profits.

It’s a pact that is rarely acknowledged. Yes, it has a Faustian aspect. But the truth is we would be lost without it. If you include the amount of social and affordable housing they’re also required to supply, then the service they provide is essential.

Factor in, too, that the construction industry in the UK is worth more than £120bn a year to the economy or 7 per cent of GDP, and that Rishi Sunak has made as one of his five key pledges to deliver before the general election an increase to GDP, and you would think government support for housebuilders is a no-brainer. Yet Steve Morgan, the 70-year-old founder of £2.1bn turnover Redrow, speaks for many in his sector recently when he declares his bafflement and anger at why the Tories are “so anti-housebuilding”.

Builders are having to contend with a planning system that is sclerotic. A government that was elected as an avowed crusader against red tape is overseeing the addition of layers of bureaucracy

In his case, the annoyance is even more marked since he donated more than £1m to the party when it was led by Boris Johnson. He is scathing about the current regime and its housebuilding secretary, Michael Gove. He accuses them of being “people who, with their grey-haired cronies, want to draw up the drawbridge, because their view is, ‘Bugger you, I’m alright Jack.’ I call them my Marie Antoinette politicians: ‘Let them eat cake.’ They’re turning their back on the young people of the country.”

These are tough times for housebuilders. Higher interest rates have dissuaded people from borrowing and buying. There are problems with labour and materials inflation and shortages. The Help to Buy initiative has gone. Post-Grenfell, safety requirements are understandably being tightened.

Again, though, they’re not causing the main cause of dismay. It’s the government not sticking to its word.

In the Tories’ last election manifesto of 2019, they declared an aim for 300,000 new homes a year by the mid-2020s. That was always a tall order, not least since the last time that figure was achieved was in 1977.

Voters gave them the benefit of the doubt. However, what has happened is that ministers have gone the other way. Where once they were actively promoting housebuilding, they now appear to be working against it.

Memories are also short. During the pandemic, the industry was hailed on high as one of the few shining stars that kept going while others froze. Constructors were applauded for maintaining social distancing on their sites (although it was never clear in practice as to how that was really achieved) and for requiring their employees to work.

That appears to have been largely forgotten. Instead, builders are having to contend with a planning system that is sclerotic. A government that was elected as an avowed crusader against red tape is overseeing the addition of layers of bureaucracy. Delays that should be cut are lengthening.

The Home Builders Federation is claiming as many as 45,000 proposed new homes a year – 15 per cent of that manifesto pledge – are being rejected because of additional rules and concerns surrounding water neutrality (impact on local water supply), nutrient neutrality (preventing the creation of excess contaminates, such as nitrates and phosphates) and recreational harm to landscape and wildlife caused by more people walking around. Persimmon has estimated 120,000 new homes are being held up because of nutrient neutrality alone – this despite claims that poultry farms cause far greater contamination.

But the real drag, the one that provokes such anger in Morgan, is the switch from making housebuilding targets mandatory for local councils to merely “advisory”.

Previously councils were required to draw up “local plans” designating land for housing development. They were given targets for new homes they had to meet and to earmark areas where they could most likely be built.

If that 300,000 figure was to be reached, this was the policy that would achieve it. But following the shock of the Tories’ Chesham & Amersham by-election defeat when nimbyism reared its head (against HS2 in that case but it illustrated the electoral damage that could be done) and a subsequent rebellion of Tory MPs at Westminster, Gove relented and dropped the obligation. The result? Some 55 councils immediately announced they had scrapped or would scrap their targets.

The result is an industry that is furious, frustrated, not knowing if it is coming or going, and feeling distinctly unloved. The fear is that it will not only be homes that are kiboshed, but new schools, clinics and the rest. Social and affordable housing will also fall. We, councils and government cannot have it both ways.