To tackle the housing crisis, ministers must end their dependence on the big builders

Part of the problem. Image: Getty.

The housing market is in desperate need of reform. As both the government and the opposition have rightly acknowledged, Britain needs to build more, better quality homes. The political will is clear to see – but in order to address the supply shortage, politicians must take on the handful of big developers which dominate the market.

Currently, there are a very small number ‘volume builders’, such as Barratt, Taylor Wimpey and Persimmon, which the government relies on to deliver the bulk of new homes in England. These companies are typically financed by private equity, which essentially means money is only raised for developments on the promise of very good returns to investors; these have averaged out at around 20 per cent of late.

While this model works well in stable economic times, it naturally faces two problems. First and fundamentally, it is very sensitive to cyclical changes in the economy. Any uncertainty in the political and economic outlook can hit firms’ share prices and reduce investment, and thus cut output sharply. Immediately after the EU referendum result, for example, the share price of the three largest housebuilders plummeted 40 per cent. 

Analysis by Homes for the North, the alliance of the biggest housing associations in the North of England, reveals that in every recession the UK has seen an immediate lost of investment in volume building, and by extension, a sudden drop in housing numbers. In the recession of 2008-10, for example, output by the volume builders fell a staggering 59 per cent.  

The second problem is that these operators tend to focus on relatively high-value properties in desirable areas, in order to get the quick-buck returns investors want. There is a real lack of building in less well-off areas, even where demand is high. This quite simply damages the government’s plans to boost construction and growth across the country, especially in regions outside London, where it is needed most. 

The present economic and political outlook creates real challenges on these fronts. Not only do we have the political instability inherent in a hung parliament, but we are entering uncharted political territory in terms of Brexit, which has, in the eyes of many commentators, heightened the risk outlook. The Office of Budgetary Responsibility’s latest Fiscal Risk Report, published in July, predicts the risk of recession to now be as high as 50 per cent.


Faced with this, it is essential that the government implements a countercyclical strategy to ensure housing numbers are not negatively impacted by any future downturn.

Housing associations can play a vital role in this new approach, as the sector is remarkably resilient to economic cycles. When the volume builders’ numbers fell 59 per cent in the last recession, housing association output fell only 3 per cent. The reason is a different business model based not on equity and the need for quick returns, but a debt-financed, longer-term approach to building homes where they are needed. This model delivers consistently, reliably, and crucially, counter-cyclically. 

The 19 member organisations of Homes for the North, for example, already expect to deliver nearly 15,000 new homes over the next 3 years. But that figure – and the building plans of other housing associations – could expand radically if the policy framework was right.  

One of the biggest issues reflects the fact that housing associations are not regular market developers, and are bound by quite strict regulations, including what rents they charge. Government says it will review the situation in 2020 – but this is too late and uncertain. The most efficient housing associations must be allowed to strike flexible rent agreements now in order to raise finance for building new homes.

Then there are other measures that could help bring the sector into the market, such as using some of the £3bn Home Building Fund to address market failure in regions outside the South East, where housing is desperately needed, but developers shun because high returns on equity are not available. We should also have regional build targets, not just a national one, which will focus the minds of metro mayors and other decision-makers on the job of encouraging a diversity of developers to meet those targets. 

If politicians shy away from this, recent history suggests the target to see 1.5m new homes built by 2022 will fall seriously short. That means older people struggle to downsize. First time buyers will not get a foot on the property ladder. Not enough private rented accommodation will come onto the market to meet increasing demand. The consequences are worrying indeed.

Mark Henderson is chair of Homes for the North.

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Covid-19 is highlighting cities' unequal access to green space

In the UK, Londoners are most likely to rely on their local park for green space, and have the best access to parks. (Leon Neal/Getty Images)

As coronavirus lockdowns ease, people are flooding back to parks – but not everyone has easy access to green space in their city.

Statistics from Google show that park attendance in countries across the globe has shot up as people have been allowed to move around their cities again.

This is especially true in urban areas, where densely populated neighbourhoods limit the size of private green space – meaning residents have to go to the park to get in touch with nature. Readers from England can use our interactive tool below to find out how much green space people have access to in their area, and how it compares to the rest of the country.

 

Prime Minister Boris Johnson’s announcement Monday that people are allowed to mingle in parks and gardens with groups of up to six people was partially following what people were doing already.

Data from mobile phones show people have been returning to parks across the UK, and also across Europe, as weather improves and lockdown eases.

People have been returning to parks across the world

Stay-at-home requirements were eased in Italy on 4 May, which led to a flood of people returning to parks.

France eased restrictions on 1 May, and the UK eased up slightly on 13 May, allowing people to sit down in public places so long as they remain socially distanced.

Other countries have seen park attendance rise without major easing of lockdown – including Canada, Spain, and the US (although states there have individual rules and some have eased restrictions).

In some countries, people never really stopped going to parks.

Authorities in the Netherlands and Germany were not as strict as other countries about their citizens visiting local parks during lockdown, while Sweden has famously been avoiding placing many restrictions on people’s daily lives.


There is a growing body of evidence to suggest that access to green space has major benefits for public health.

A recent study by researchers at the University of Exeter found that spending time in the garden is linked to similar benefits for health and wellbeing as living in wealthy areas.

People with access to a private garden also had higher psychological wellbeing, and those with an outdoor space such as a yard were more likely to meet physical activity guidelines than those without access to outdoor space. 

Separate UK research has found that living with a regular view of a green space provides health benefits worth £300 per person per year.

Access is not shared equally, however, which has important implications for equality under lockdown, and the spread of disease.

Statistics from the UK show that one in eight households has no garden, making access to parks more important.

There is a geographic inequality here. Londoners, who have the least access to private gardens, are most likely to rely on their local park for green space, and have the best access to parks. 

However the high population in the capital means that on the whole, green space per person is lower – an issue for people living in densely populated cities everywhere.

There is also an occupational inequality.

Those on low pay – including in what are statistically classed as “semi-skilled” and “unskilled” manual occupations, casual workers and those who are unemployed – are almost three times as likely as those in managerial, administrative, professional occupations to be without a garden, meaning they rely more heavily on their local park.

Britain’s parks and fields are also at significant risk of development, according to new research by the Fields in Trust charity, which shows the number of people living further than a 10-minute walk from a public park rising by 5% over the next five years. That loss of green spaces is likely to impact disadvantaged communities the most, the researchers say.

This is borne out by looking at the parts of the country that have private gardens.

The least deprived areas have the largest gardens

Though the relationship is not crystal clear, it shows at the top end: Those living in the least deprived areas have the largest private green space.

Although the risk of catching coronavirus is lower outdoors, spending time in parks among other people is undoubtedly more risky when it comes to transmitting or catching the virus than spending time in your own outdoor space. 

Access to green space is therefore another example – along with the ability to work from home and death rates – of how the burden of the pandemic has not been equally shouldered by all.

Michael Goodier is a data reporter at New Statesman Media Group, and Josh Rayman is a graphics and data visualisation developer at New Statesman Media Group.