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Eastern Block
Housebuilder – June 2012

A report published earlier this year by HBF set out the extent of the housing crisis in the east of England, revealing that fewer than half the homes the region requires are being built. Mark Smulian asks local politicians to explain why.

"Not enough planning permissions" is the perennial cry of housebuilders. "Too many applications that don't fit our policies," local authorities tend to respond.

Now that regional spatial strategies and the housing targets they underpinned have been swept away, the Localism Act has freed councils to determine their own projections of household growth, and that will unnerve many builders.

Political pressure on councils tends to come from voters who do not want new homes built near to them rather than from builders -however convincing they think their economic arguments are.

The HBF has been looking at councils' records on granting planning permissions, and it has not liked what it has seen.

But councils, even those well-disposed towards development, insist that the recession has led to fewer planning applications and that it is not their fault if permissions are consequently fewer.

Since both sides must work together, exchanges of accusations will not be helpful. So, what drives the policy of an apparently intransigent council, and why are some pro-building and others not?

Take the East of England, a region where demand and prices are not far behind the south east.

It is largely rural and has extremes of prosperity and deprivation. Cambridge, for example, largely thrives while East Jaywick in Essex was last year named as the most deprived area in England in the government's Indices of Deprivation.

Parts of the region are in the London commuter belt, but it is not as densely populated as the south east and one might expect planners would have the space to meet housing demand.

But according to the HBF's East of England Housing Crisis report published in March, only 44% of the houses needed are being built and residential planning permissions are down 37% to 14,596 since 2007.

Some of that may be due to the intervening recession, although report author Tim Collins says: "People have argued that the number of planning permissions sought may have fallen but feedback from HBF members suggests that is not the case. Applications fell in the recession but there is not a fall off that correlates with the financial crisis."

Among the "lowlights" found by the HBF was a 69% rise in the number of families on housing waiting lists in the last decade - equivalent to 65,000 - and an average house price increase from 86,950 to 195,000 over the same period.

If enough homes were built to meet household projections then eastern councils would collect an extra 157 million from the new homes bonus.

Councils argue that, quite apart from recessionary effects and public hostility to building, they have to take these multiple factors into account and most say they are allowing as much building as they can consistent with their other policy objectives.

Were they to permit more new homes, would the physical and social infrastructure be there? If four bedroom executive homes spring up, does that do anything for people on the waiting list? If they allow building in villages will the resulting cars clog the roads?

Take St Albans in Hertfordshire, where the lowest house prices are more than 12 times average earnings and which is singled out by the HBF report for a lack of published information "which suggests that they are not enabling the construction of homes that local people need".


Planning head Heather Cheesbrough says the relevant information is published and points out: "St Albans is an extremely desirable place to live. The district is located in close proximity to London and to key travel corridors. We have excellent schooling and high quality physical, social and environmental infrastructure. All these factors affect the housing market and house prices."

St Albans is also 81.4% green belt, which limits where the council can grant planning permissions even if it wished to. Cheesbrough says the priority for available land is "affordable housing and small to medium dwelling types".

St Albans' annual monitoring report stated that 3,557 extra homes were built in the decade to 2011 "very close to the East of England Plan target of 360 dwellings per annum".

So if green belt constrains St Albans, what has been going on in Maldon in Essex, a place where affordability is little better and where housing starts collapsed from 130 per annum to just 20 in the five years to 2011, compared with a household growth projection of 400?

Planning policy team leader David Coleman says this is in part because of the change in the planning system - the RSS has gone and the local development plan is yet to be written.

It will be based on a local projection of new households by consultancy Roger Tym, which will also covers the Brentwood and Chelmsford areas. Meanwhile, Maldon uses a 2005 local plan of which the allocation for new homes has largely been met so "therefore supply of new sites is limited at the current time", Coleman says.

There is hope for builders. Coleman says the old East of England Plan called for 115 new homes a year, which the council thinks is "significantly less than the household growth projections".

He notes: "Recent housing completions appear to have been disproportionately affected by market conditions and uncertainty. "Relatively few major residential planning applications have been received, but this trend is not expected to continue."

What about Suffolk Coastal, castigated in the report as among the places at "particular risk of neglecting housing growth at the expense of their communities and the local economy" by failing to secure the maximum new homes bonus and consequent jobs available?

Cabinet member for planning Andy Smith replies: "This council would strongly reject any suggestion that it is responsible for a low housebuilding rate".

"While it is certainly true that some housing developments have been put on hold in the last two or three years, to our knowledge this is wholly down to market forces rather than any actions by the council."

Suffolk Coastal has discussed phasing of developments with builders but has "largely insisted that the affordable housing element of these schemes must be proceeded with as well", Smith says.

He admits to uncertainty while the council finalises its core strategy, but says 1,500 homes have permission but have not been built, and insists this is not the council's fault.

The Localism Act will see a sharp cut in building rates in Uttlesford in Essex, the area around Stansted airport, which was praised in the HBF report for "enabling the construction of the homes [people] desperately need".

Uttlesford had intended to concentrate development in a new village at Elsenham, near Stansted, under the old regional plan.

Its current proposal instead is to have the bulk of new homes in Great Dunmow and Saffron Walden, with between 60 and 400 homes in each of six large existing villages and another 100 scattered elsewhere.

Susan Barker, cabinet member for environmental services, says: "Uttlesford is working towards an average of 338 homes per year from 2013 to 2028. Additional sites will need to be found for some 220 of those, but overall the total will be about 1,000 fewer homes than demanded by old the East of England plan."

Hardly music to builders' ears since this is one of the wealthiest and most rapidly growing parts of the country.

Bedford Borough Council is among the more sympathetic to housebuilding, though it dismisses the idea that its planners are responsible for a decline in starts. Its draft housing strategy notes: "Market demand, and the availability of mortgage finance, rather than land supply or the planning system is the key constraint on the delivery of new housing in Bedford ... a faster rate of build would be possible if supported by market conditions."

In contrast to many areas the planning system in Bedford has supported the release of sites for development.

The council's core strategy calls for 17,570 homes in the period to 2021, of which all but 1,300 will be directed to the growth area of Bedford, Kempston and northern Marston Vale. Sites have been identified with a total capacity of 13,456 homes.

Bedford's elected mayor Dave Hodgson, says: "The council's core strategy requires new dwellings to provide a mix of sizes, types and tenures to meet the identified needs of all sectors of the community." Hodgson says that to reflect housing need Bedford will demand 30% affordable homes on sites with 15 or more units.

The message from all this is that few councils are ideologically opposed to new homes and that builders need to win the public's hearts and minds so that opposition is muted.