Incentivising development away from precious greenfield sites
Campaign to Protect Rural England
The Campaign to Protect Rural England urges Government to get volume builders to develop their existing brownfield sites, before needlessly ravaging more precious open land.
There’s little dispute that the UK needs more housing, but due to warped incentives and a poor understanding of the sector, the English countryside has become the go-to cash cow for volume housebuilders.
Exactly what the housing target should be depends on who you speak to, but common estimates sit between 200,000 and 250,000 new homes each year- a far cry from the 141,000 built last year. According to the Campaign to Protect Rural England (CPRE), local planners are buckling under the pressure to meet this demand, and too readily hand over precious greenfield sites, in the blind hope that more homes will be built.
“There are a number of reasons these houses don’t get built,” said Matt Thomson, Head of Planning at CPRE.“Sites isn’t one of them.”
“The main problem is that the Government assumes, contrary to all available evidence, that the more sites you release, the more houses will get built. But if developers got on with building the houses they’ve already got planning permission for, that would provide 2-3 years’ worth of new homes.”
Thomson is referring to the ‘landbank’ suitable for 600,000 homes for which property developers have already been granted planning permission, but still haven’t built. In searching for the solution to the housing crisis, Thomson asks policymakers to look more closely at why these developers are reluctant to build, not merely at what else the countryside can offer them.
Part of the problem, he says, is too much reliance on ‘volume’ housebuilders, whose business models are predicated on house prices continuing to rise:
“They buy land at a certain rate on the assumption that house prices are going to rise a certain amount. That’s a logical approach to maximising their profits; as a business you wouldn’t expect them to do anything else. The question is whether that’s the right way to achieve the housing that we actually need.”
Another factor is the lack of capacity, something the sector has been asking for solutions to for years: a shortage of contractors, especially bricklayers, and a shortage of material. Which raises the question of whether they could build to target, even if they wanted to. Thomson rightly argues that only once the sector has proven it can build 200,000 homes a year, should planners look at releasing more sites. “The last time they came close was about 175,000 back in 1988,” he added, “at the absolute peak of the ‘80s housebuilding boom.”
A third component, which is more easily corrected, is that developers are reluctant to build out existing brownfield sites, when new - and far more lucrative - greenfield sites are so easy to acquire.
“It’s simply that brownfield sites can be more expensive to develop,” said Thomson. “You often have to remove existing buildings from the sites, they might have contamination and that kind of thing to deal with. And of course greenfield sites don’t have any of that.”
Given the choice, developers will push for the release of more greenfield sites, and in the current framework, they can and they do.
Once local planners fail to meet their housing supply targets, they have difficulty refusing permission for new sites, as they will likely have that decision overturned on a planning appeal. Developers are therefore incentivised to slow development on their brownfield sites, in the knowledge that the local authority will then be forced to release more greenfield sites.
According to Thomson, the simplest way to correct these incentives, and get these developers to focus on building out their existing brownfield sites first, is to transfer the responsibility for the housing target onto them.
A simple step would be to impose a financial penalty on developers that would outweigh any existing incentive to delay construction. Developers could be fined for not meeting their housing target, for example, or after a prescribed timescale be forced to pay council tax on the homes they haven’t built. Thomson also suggested that such conditions could be written into a Section 106 agreement, as part of the application process, without the need for additional legislation.
“But actually, the revocation of the right to build is perhaps more realistic,” he adds. “If you’ve got a developer with planning permission for 100 homes, and they only build 20 of them, the idea would be the developer would be obliged to hand over to another developer. This might be the local authority, a housing association, or it might be a small house builder, who are often able to build quicker than volume housebuilders.”
Aside from the obvious and inherent merits of preserving precious greenfield sites, Thomson explained that redeveloping brownfields is “a win in itself.” Left neglected they attract crime, vermin and are often contaminated - whereas development transforms them into something the community actually wants.
Conversely, releasing new sites slows down the planning system with further applications, public consultations and appeals, while roping communities into arguing about which piece of land should go next. All the while “the sites that have already been agreed by the community, which might include brownfield sites, don’t get developed.”
“We start from the perspective that every bit of open land is precious,” said Thomson. “If we do need to use greenfields, then let’s make intelligent decision about which greenfields get used and release them in a sensible order.”
“You’ve got to recognise that there are development needs that need to be met, and planning, proper planning, is the best way to ensure that the right development takes place in the right places. That’s what we’re asking for.”
