JLL Housing Policy update: Building consensus, building momentum
LONDON, 26 September 2017 — The UK Government has a domestic policy agenda that is at least as challenging as the EU exit negotiations are likely to prove, and with new Housing Minister Alok Sharma now in place and the coalition agreed, Government can begin to focus on the endemic housing challenges of undersupply and chronic unaffordability that previous administrations have failed to effectively address.
Adam Challis, head of residential research at JLL comments: “The approached taken by previous Governments has been mired in party politics, which has undermined stability for the planning system and subsequently for the land and broader housing markets. We firmly believe that the UK needs a clearer approach that relies on three key elements: Bi-partisan political support, collective will and ambition and pragmatism. There is broad agreement across political parties, and the industry more broadly, should Government seek out and commit to long-term solutions.”
Actions for Government to drive a step change in housing supply
1. Build to rent – There is an opportunity to leverage the £20 billion of capital that is allocated by institutions towards Build to Rent in the UK. This weight of investment will ensure continuous improvement of the sector creating a robust BTR asset class within a decade.
2. Registered Providers - This sector deserves a new deal from Government which recognises the impact that rent reviews and lower capital grant have had on its ability to create greater resilience in delivery pipelines. Government must also recognise the enormous opportunity that exists with long-term capital investors and provide greater freedoms for RPs to engage with different funding structures to expand construction activity.
3. Off-site housing delivery – There is no room for complacency surrounding modern methods of housing construction as there is simply not the capacity to meet housing targets without investment into digital construction.
4. Homes England - The transformation of the HCA as a more nimble and market-interventionist Government department is promising but further support is needed through leadership and deeper financial commitment to reduce delivery times, promote more direct market engagement and allow longer-term investment into new schemes.
5. New towns and urban extensions – Modern placemaking and community building must be at the heart of any successful new towns programme, with the principles requiring long-term commitments and flexibility to changing conditions.
6. Building Consensus, Building Momentum underpins the very basis of what Government needs to adhere to, to make a genuine difference in solving the UK housing crisis.
Adam Challis concludes: “The continued failure to address the structural problems with UK housing delivery demand a different approach. By building consensus, setting aside partisan policy approaches and working together with local authorities, housing policy reform has a genuine chance of success. It also means that bolder decisions can be made without the same fears of party-political backlash. There is an alignment of interests across the full spectrum of stakeholders on the need for a new approach. This is a rare opportunity that should not be ignored.”
Consensus will also be important for engagement with the wider population. An uptick in housing delivery on the scale that is required will mean an honest conversation with local communities. Difficult decisions, and leadership, are required.