Proposals from a Conservative MP to shake up the planning process in order to boost housebuilding have drawn a mixed reaction from the industry.
Former housing minister Nick Boles has set out the wide-ranging measures in a bid to ratchet up housebuilding without resorting to major state intervention.
They include giving councils permission to use compulsory purchase orders to commandeer both greenfield and brownfield sites to build new homes.
Under the proposals, local authorities would pay for the land at ‘current use value’ rather than at a value inflated by building permission, and would be able to reinvest profits from the sale of housing in infrastructure.
Developers that failed to build out land at an agreed rate would be forced to sell land on to others who would be able to meet the target, boosting competition as well as supply.
The Conservative MP also proposed setting up a Grenfell Housing Commission to build 500,000 homes over a 10-year period as a memorial to those who were killed in the blaze.
It would be funded by a £50bn bond promoted as a patriotic investment, and all public-sector land not in current operational use would be transferred to the Commission.
Finally, Mr Boles proposed giving people in urban areas the ability to add one or two more storeys on to their homes without obtaining planning permission, up to a maximum of four storeys, in order to boost housing density.
The government has come under pressure to boost housebuilding as youngsters increasingly shut out of homeownership turn to Jeremy Corbyn’s Labour Party, which is pledging to build over a million new homes.
Mr Boles' proposals echo some key planks of Labour's housing policy within its manifesto.
These include building at least 100,000 council and housing association homes for rent or sale a year "for genuinely affordable rent or sale".
Labour will establish a new Department for Housing to focus on tackling the crisis, tasked with improving the number, standards and affordability of homes.
It will also prioritise brownfield sites, and launch a National Transformation Fund to boost housebuilding by supporting the construction sector.
Mr Boles called on fellow Tories to back his plans, pointing out that homeowners are more likely to vote Conservative.
Buying agent and market commentator Henry Pryor said: “Those of us who had wondered if there was any common sense left lurking within the Conservative Party will take some comfort from what Mr Boles is talking about.
“Leaving the private sector to solve affordability hasn’t worked because the private sector needs to make a profit. We need to be less concerned about those who already own homes and provide solutions for those left behind.
“Paying open market development values for land to provide social housing in an era of record low interest rates is clearly crackers."
Toby Lloyd, head of policy at Shelter, called on the government to take Mr Boles’ ideas on board and reform the law to “let the true market values [of land] come through.
He said: “We are not talking about dispossessing landowners unfairly by refusing to give them the market value of their land. We’re talking about removing a legal distortion that artificially inflates land values in order to allow the true market value to emerge.”
Ray Boulger, senior technical manager at London-based John Charcol, backed the proposal to reinvest some of the profits from land into infrastructure.
He said: “Consider the price of agricultural land compared to land with planning permission. Someone in government should look at how the huge increase when it gets planning permission can be used to share the increase in value."
But he rejected proposals aimed at forcing developers to build on land where it may not make economic sense.
Mr Boulger’s concerns were echoed by Oliver Marley, mortgage adviser and head of research at London-based Independent James.
He said: “If building homes is not profitable, it will not be possible to do so and could in fact make the problem worse as developers pick different areas to build on.”
David Hollingworth, associate director, communications at London and Country, said the plans did little to force the debate on tackling the shortage in housing supply.
He said: “There are some themes that have been talked about before, and these comments may help to give some added momentum to pushing things in the right direction and considering more radical solutions.
“Of course, there will always be the political sensitivity, and just as some are beginning to call for more thought around the use of green belt, there is bound to be a very solid opposition to that kind of activity. That’s bound to be one reason why regeneration of brownfield sites has so far been the preferred option.”
The Department for Communities and Local Government declined to comment on Mr Boles’ proposals.
simon.allin@ft.com
