Government proposes plans to build and sell new homes

The government has announced a number of “radical” new measures designed to boost the house-building sector, including plans to build and sell new homes on public land.

Announced by Treasury chief secretary Danny Alexander as part of the National Infrastructure Plan 2014, the proposal would see the government plan and commission homes before building them to sell directly. A pilot programme on the former RAF base in Northstowe, near Cambridge, to include 10,000 homes will be evaluated for feasibility before the scheme is rolled out on a wider scale. The strategy will be enacted through the Homes and Communities Agency instead of selling land into the private sector, and is intended to help deliver some of the 200,000 or more new homes needed a year.

Mr. Alexander said: “The message to the house-building sector would be simple: if you don’t build them, we will.”

He added: “New houses support economic growth and are a crucial element of a fair society. We will vastly increase supply by providing funding certainty, unlocking capacity in housing associations and kick starting stalled regeneration projects.”

However, the proposal is already facing criticism from the house-building sector. Mark Littlewood, director general of the Institute of Economic Affairs (IEA), said: “The idea that we need the government to build housing because house prices are high is as absurd as proposing that the increased price of food requires government to buy up land to run farms.”
 

Mr. Littlewood added that the government was recognising the negative impact of the UK’s “draconian” planning laws, but instead of addressing the issue it was exempting itself from existing regulations at the expense of the private sector.

This attitude is shared by Sam Bowman, deputy director of the Adam Smith Institute, who said: “The housing shortage does not exist because the private sector doesn’t want to build new homes – prices are rising rapidly, which signals demand is outstripping supply and there is profit to be made. The problem is that developable land is so scarce because the planning system makes it so.

“This announcement feels like just one more misstep by the government on planning and housing – the key is not just to build more houses, but to build more houses that people actually want to live in. The answer is to free up land in places where demand is already there.”

Mr. Bowman added that this could mean rolling back the Green Belt to supply land in areas of demand, which would in turn bring land and house prices down.

The launch of the National Infrastructure Plan also included plans to turn Bicester into a green town and support the delivery of up to 13,000 homes, as well as news of the first œ100 million investment to provide infrastructure and land remediation at Ebbsfleet in preparation for the construction of a garden city. An extension to the capital settlement for affordable housing by œ957 million in 2018-19 and 2019-20 was also announced.