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How to fix the burning injustice that is Britain’s housing market For too long, infrastructure funding in the UK has been the preserve of central government

Residential Investor

Affordable housing is one of the key policy challenges of our time. But as with so many other major policy problems, we face a continued lack of imagination that leads many to think that the housing crisis can be solved with more of what worked last time, commanded from offices in Whitehall.

This is not 1955. We need new thinking, and new approaches. In particular, we need to recognise that rural and urban areas face very different challenges and need different solutions.

In rural constituencies like mine, the way to unlock new housing is to incentivise councils and communities to build according to local need, not national targets, and to keep the tax revenue from new homes to invest in local infrastructure. If we just continue to fuel demand and incentivise the high-volume house dumping that too often passes for development, we will not solve the problem.

We must be clear about the scale of the challenge. Nowhere is the breach between the generations more profound than in housing. Housing was right at the heart of that post-war, Macmillanite model of growth: the idea that each person will be better off with the promise of owning a home as their principal asset.

The post-1980s house price boom, South East nimbyism and the Great Crash of 2008 brought that dream to an end. But to recover that ideal we must now seize the moment and be truly bold.

To be fair, we have already made a start. As the Chancellor set out in the 2017 Autumn Budget, the only sustainable way to make housing more affordable over the long-term is to build more homes in the right places.

The housing supply has increased to 217,000 by 2016-17, and further measures were announced in the Autumn Budget to raise the housing supply by the end of this Parliament to its highest level since 1970s, on track to reach 300,000 per year. Equally, £15.3 billion of new financial support for housing will be made available over the next five years, bringing total support for housing to at least £44 billion over this parliament.

The Government will aim to provide 225,000 units through the Affordable Homes Programme up to 2021, and the Chancellor set out a funding increase to £9.1 billion for affordable housing.

But we must not fool ourselves. The real work must still be done. That cannot just mean incentivising the big housebuilders to build mass commuter-housing around the South East. We have tried before.

The old idea of suburban living – two cars, endless traffic jams – is an out-of-date 1950s model. Today, the younger generation want to use public transport, work flexibly and embrace a much healthier lifestyle.

For the last 20 years, long before becoming a Member of Parliament, I have argued that our planning model is broken. The developer-led model, enshrined in the 1940s Planning Acts — in which the planning system simply sets out which areas cannot be developed and areas where it is recommended by the council as a guide for applications for developments which are led by developers — is not really a planning system. It is a development application control process.

Ultimately, for high density housing and high quality development, we need to move to a system which is “plan-led”, whereby the elected representatives of communities put together a vision for their town, covering planning, infrastructure, and other elements, including social care, and then approach developers to build it, rather than the other way round.

In the 15 years before I came to Parliament, I was building businesses in East Anglia and helping to develop the Cambridge cluster. In the Cambridge cluster, housing is seen as the most urgent issue of, and for, the local economy. But quality and sustainable housing is being held back by woeful infrastructure, endless top-down “initiatives” from Whitehall to boost supply, and a lack of local government and private sector leadership.

I used to be on the board of the Greater Cambridge Partnership, helping put together a private sector-led vision of how the greater Cambridge cluster should develop, and saw the problems first-hand. The lessons were simple and remain so: lack of real local leadership, and freedom for local council leaders and businesses to build what is needed. The Cambridge cluster could have used the £1 billion City Deal to raise a multi-billion-pound infrastructure bond but was not able to do so.

Along the Cambridge-Norwich corridor, thousands of new houses have been dumped in our towns and villages along the roads, while the railway line is neglected. Our roads are being turned into car parks and we are building exactly the sort of unhealthy, 1950s living – high car use, commuting, sedentary lifestyles – which in turn is fuelling the obesity and diabetes time bombs, and increasing pressure on local public services.

The truth is that long-term infrastructure investment has been one of the great failures of the post-war years in Britain. For too long, infrastructure funding in the UK has been the preserve of central government.

The privatisations of the 1980s did much to open up the monopolies, and unlocked massive investment in some areas, but road, rail, and energy infrastructure have remained in the hands of Whitehall quangos or a few big companies wholly reliant on Whitehall. As a Member of Parliament, I see first-hand the stall cycle of local areas left lobbying for Whitehall infrastructure spend, instead of having given the freedoms to get on and build the infrastructure we need.

For inspiration, we should look back to our Victorian forebears. The genius of the Victorians was to finance the infrastructure through the profits they made on housing. They blazed a trail in the second half of the 19th and early-20th centuries with a massive wave of infrastructure investment which still shapes much of the modern landscape – the towns and cities, roads and railways, utilities, universities – we know today.

Residential Investor

About George Freeman

George Freeman

George Freeman MP is the Chair of the Conservative Policy Forum and the Founder of the Capital Ideas Foundation and the Big Tent Ideas Festival. He is the current Conservative Member of Parliament for Mid Norfolk.

Articles by George Freeman

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