The Housing and Planning Bill is a disaster

The Housing and Planning Bill being debated at Westminster will only make Britain's housing crisis worse.

Anne Williams
5 January 2016

"Phoenix prefab" by User Oosoom on en.wikipedia - Own photograph - Oosoom. Licensed under CC BY-SA 3.0 via Commons -

In 1894, Conservative MP Lord Francis Hervey made the case for the provision – at ratepayers’ expense – of decent housing for poor agricultural workers in Suffolk. Having explained the economic rationale for doing so – which was, as he pointed out, sufficient in itself – he went on to say, ‘but it is impossible to forget that we are in presence of other considerations, social and moral, which, though not susceptible of being gauged by money values, are intrinsically of still higher importance.’ Matching words with deeds, Lord Hervey oversaw the creation of England’s first rural council housing.

Lord Hervey would weep at the current Conservative government’s Housing & Planning Bill 2015, which reaches Report Stage in the Commons on 5th January. It tramples on social and moral considerations and is economically both damaging and ridiculous. There is no justification for it.

There is no question that Britain faces a grave housing crisis, but tragically the bill will do nothing to reduce, much less resolve it.

There are some obvious things that could be done: a housing–related tax would lower prices; some sort of restraint on private sector rents would also help. The bill offers no such thing. The bill’s emphasis on home ownership puzzles the Chartered Institute of Housing (1) and a host of local authorities, as both the problem and the solution involve supply and affordability.

Supply on its own is irrelevant when priced beyond the reach of people on ordinary incomes. The thousands of overpriced homes already built or in the pipeline simply reduce available land and push up prices all round. Affordability is critical.

By far the greatest boost to both supply and affordability would be for the government to invest in new social rented housing.

Instead, the government is actually reducing both the supply of existing social housing – already much depleted – and reducing the capacity of social landlords to build more.

To meet demand, an estimated 200,000 new homes should be built each year for the duration of this Parliament. (CIH ibid pg 4). Nothing close to this number has ever been achieved without a major investment in social housing. And it is indeed an investment, both long term and short – the £1.25bn annual grant for social housing saves the Treasury £4.5bn annually in housing benefit. (2)

As for home ownership, consider this: in London, first–time buyers need a household income of somewhere between £66k and £77k for a foot on the property ladder: 70% of households earn £50k a year or less – most of them far less. (3)

We now inhabit a political universe in which a flat costing over £1m is officially classified as affordable housing.

In low–wage Cornwall, a high percentage of second homes inflates house prices while leaving many local people dependent on seasonal work. Very few of the 28,000 people on Cornwall’s housing register can afford any form of home ownership at all. This is of course true of housing lists across the country. (4)

But the Housing Bill’s flagship policy is Starter Homes: at a 20% discount on local prices they will be unaffordable to people earning the Living Wage in 98% – repeat, 98% – of the country, and unaffordable to most people on the median wage in all but the North of England. (5) In relatively high–earning, high–priced Surrey, even a couple each earning the local average of £28k per year still falls short of the estimated necessary minimum income. (6)

What’s more, there is no upper limit on household income for purchasers, and nothing to prevent their purchase as a buy–to–let investment.

The Starter Homes policy will require councils to build a housing type they don’t need and reduce the land available to build the housing they do. And the discount (offered to initial buyers only) comes at the expense of any contribution to the provision of genuinely affordable housing or to local infrastructure, i.e., schools, doctors’ surgeries, transport links, etc.

Extending Right to Buy to Housing Associations is another poorly considered idea. It will see affordable dwellings re–sold on the open market at prices far beyond the reach of the people they were built for, forcing out young people and families and low–wage earners with strong local connections – and with an additional impact on local businesses suddenly bereft of a workforce.

The government promises one to one replacements,(7) but this is frankly unachievable according to the Chartered Institute of Housing (8). And only one in ten council homes lost to RTB has actually been replaced – an average that masks the stark reality in key specific cases: of 960 council homes lost to Manchester since 2012, for example, just 2 have been replaced. (9)

It is awfully difficult to see Conservative MP and London Mayoral candidate Zac Goldsmith’s proposed amendment promising a 2 for 1 replacement in London as anything other than a profoundly cynical piece of electioneering.

The forced sale of council homes in high value areas obviously reduces the already short supply of affordable housing – by at least 113,000 homes (10). It will force families into temporary accommodation at great expense to the public purse, and increase competition in the private rented sector, further driving up rents and increasing the housing benefits bill. It will also, obviously, cause enormous stress and hardship.

The revenue from the sales will be seized by central government, to fund Right to Buy discounts. The councils’ ability to build will be further reduced, as lenders will have no confidence in the security of revenue streams or future capital receipts.

There will also be knock–on effects in the low–income areas that former tenants are forced to move to, with increased pressure on local services. Finally, it will create ghettoes of poverty and social deprivation as well as destroying deep–rooted communities and reducing the social mix in wealthier areas.

A British government should be ashamed that the British Quakers (11), in their written response to the Bill, deemed it necessary to remind them that ‘People’s value is not dictated by their wealth’ and to point out that ‘housing and housing policy are part of the whole social and economic life of the country.’

More households are renting from private landlords than at any time in the post–war period – at a cost to the public purse of £9.3bn in housing benefit. Three in ten privately rented homes fail to meet regulatory standards of decent homes, and one in six are physically unsafe, with Category 1 hazards posing a threat to life and health. Some 740,000 households – half a million children – inhabit these dangerous homes. (12)

So the bill’s proposed Register of Rogue Landlords would be welcome, if the maximum penalty were more than a mere ‘cost of doing business’ fine of £5k, if funding cuts to local authorities had left them with the capacity to inspect properties and investigate complaints, and if the registry were available to the public. It fails on all counts and what’s more there will be no funding for cash–strapped councils to enable them to administer the database.

With the ‘Pay to Stay’ policy, we hear that familiar leitmotif – the government encouraging people to resent one another. Renters in the private sector are bled dry; apparently it is unfair that council tenants are not. Pay to Stay requires council tenants to pay increased rent if their household income exceeds a certain threshold. The Bill amended at Committee Stage specifies neither the threshold, nor whether the increase will be to full market value, or a proportion thereof, or determined with reference to other factors. These critical details are left to the discretion of the Secretary of State.

It’s entirely possible that a couple both earning the new Living Wage could be considered ‘high earners’ when both are paid as little as is legally allowed. If their rent is then set at full market value, a third or more of their modest pre–tax income will be carved out in additional rent.

If families earning ordinary incomes of, say, £40,000 a year suffer financial penalties for their modest success, there is a negative impact on the wider economy of greatly reduced spending power, the ability to invest in their children’s future, or to provide for a decent old age.

Pay to Stay acts as a disincentive to try to earn more – in direct contradiction of government policy – as any career progression or additional hours would have to be measured against the security of one’s own home.

George Osborne’s claim in his Budget speech last July that "it’s not fair that families earning over £40,000 in London, or £30,000 elsewhere, should have their rents subsidised by other working people" rests on a fallacy.

Social rents are not subsidised. They are set at levels which pay in full for the management, maintenance and renewal of properties and the debt interest on landlords’ borrowing. In fact, many social landlords generate a surplus which can be invested in new homes.

Rather than seeking to enforce a policy of ‘Resent thy Neighbour’, the government should ensure an adequate supply of social housing. It is, not least, a far more realistic way to promote social mobility than making ambition and hard work unaffordable.

As well as being intrusive and divisive, Pay to Stay will be extraordinarily cumbersome and costly to administer – think of the vast number of people who are self–employed, or on zero–hour contracts, or working variable hours! Councils will be obliged to meet the huge costs and person–hours involved without any additional funding and, once again, any gain in rent receipts will be seized by central government.

In a further punitive measure, the bill will end secure tenancies for council tenants, reducing them to the same rootless insecurity as private rental tenants, with maximum tenancies of 2 to 5 years. It would have been far better for the government to have sought to alleviate the plight of private tenants.

Short–term tenancies reduce good employment opportunities as people are forever having to up sticks and move. Teachers and GPs are hindered in their work by the constant churn of those in their care, and people are deprived of the chance to take part in civic life, to become part of a community, and put down roots. Even in old age, they will be strangers.

There are so many ‘damaging and ridiculous’ things about this Bill – we’ll look at just one more:

Permission in principle is based on the fallacy that housing supply is held back by the need for developers to secure planning permission. The English Cities of the pro–development Core Cities Group point out that any ‘blockage’ is more often around market viability and the pre–development costs of site clearance and decontamination.(12)

In their written response to the Bill at Committee Stage, they assert that there are many circumstances in which automatic permission in principle should neither be applied for nor granted, and go on to state that ‘Planning Permission in Principle increases the risk that fundamental issues like flood risk or contamination as well as issues about community infrastructure and place–making will be missed.’

Our countryside and historic environment also face grave threats under this policy. Permission in principle very nearly gives carte blanche to developers, and undoes several centuries of accumulated knowledge and good practice.

The government may honestly and sincerely believe that developers, hedge fund managers, overseas investors and private landlords are best placed to advise them on the housing crisis. They are mistaken.

The Housing and Planning Bill 2015 makes a mockery of localism and directly contradicts several core elements of conservative philosophy. Centralised, authoritarian, and discretionary, it leaves governance very vulnerable to corruption, bureaucracy and financial incentives from private interests.

In the words of Gweek Parish Councillor Tristan Mackie, it betrays ‘a devil may care attitude to the people, and to our green and pleasant land.’ (13)

Under the protection of the sly new ‘English Votes for English Laws’, even an exceptional show of solidarity from the Opposition will avail us nothing. We can only hope sensible amendments can mitigate the damage – and that the House of Lords rise to the occasion to protect the people and ‘disappoint’ the government.


1. & At various points: Chartered Inst of Housing briefing paper, pg 4.

2. Re savings in housing benefit from social housing: couldn’t remember my source so checked w a housing consultant (it’s also widely quoted elsewhere):

@AWilliamsTweets Take away 'subsidy' & 3.328m SRS tenants get same HB as PRS = £4bn pa saving & £170pa per taxpayer

— Joe Halewood HSM (@SpeyeJoe) December 31, 2015

@AWilliamsTweets 1,526,915 sorry at latest figures Aug 15

— Joe Halewood HSM (@SpeyeJoe) December 31, 2015

3. London housing figures

London wages, pg 5 para 1

4. Cornwall low wage. No of people on Cornwall housing waiting list

5. Unaffordability of starter homes: Shelter, Crisis.

6. Avg wage & unaffordability in Surrey (footnote 3)

7. Govt promises one to one, widely disseminated, also stated by Brandon Lewis in Commons debate in Oct 2015, 17 paras from end:
“I have two points to make to my hon. Friend. First, for every home sold an extra home will be built in that area. Secondly, depending on the particular details of the area, the rural exemptions may apply, too. At the very least there will be an extra home built for every home sold.”

8. RTB replacements frankly unachievable CIH ibid pg 11 “However, to date, starts on replacements have only been made for some one in ten of the properties sold,3 and while this may improve a little over time it is clear that the limited and complex financial arrangements for the use of the sales receipts are in practice incapable of supporting anything like a full replacement programme.4”

9. 960 Mancs homes lost to RTB; 2 replaced.

10. At least 113k homes: Pg 3

11. British Quakers

12. privately rented homes; stats, etc

13. Gweek Parish Councillor Tristan Mackie

Further reading:

Capital Economics: report evaluating the economic case for building 100k new social rent homes each year

Terrific Commons debate on housing in July this year

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