Monday, November 13, 2017

Will the Chancellor build up, out or not at all?

A number of housing providers are calling for the Chancellor, Phillip Hammond, to relax planning laws in the upcoming budget announcement next week, if the UK is going to have any chance of tackling the housing shortage.

A group of housing associations and companies have written to the Chancellor asking him to allow developers to increase the height of buildings without seeking special planning permission. The signatories, which include influential housing associations like G15, Midland Heart, Orbit, Place for People and Placeshapers, wrote “We believe that ‘Build Up, Not Out’ has the potential to substantially increase the supply of sites for development.’

The so called ‘Build Up, Not Out’ policy was originally submitted to Department for Communities and Local Government (DCLG) by Conservative MP John Penrose (Weston, Worle and the Villages). The idea is that the policy would allow developers to increase the height of developments in line with the tallest existing buildings already in the area, or to the height of the largest surrounding trees.

The aim of Mr Penrose’s policy is to produce mansion blocks, rather than towers, and avoid the need to build on the green belt.

Mr Penrose has said that "Building up, not out, is greener, because we don't have to concrete over more green fields, will breathe fresh life into hard-pressed traditional town centres and create mansion blocks, Georgian terraces and mews houses rather than controversial sky-high tower blocks, so that our towns and cities will become prettier too."

DCLG Secretary of State Sajid Javid has already had his calls for ‘borrow to build’ ideas quickly dismissed by Chancellor Hammond, despite support from the property industry. While Mr Penrose has been looking to gain support from his Parliamentary colleagues for ‘Build Up, Not Out,’ Secretary of State Javid has been arguing that record low interest rates could be used to borrow billions for new house building projects.

Local Government leaders have warned that councils have been forced to sell off properties, but are unable to build the necessary replacements. Local authorities can only keep one third of money generated from the sale of homes under the right-to-buy scheme and cannot in turn borrow to make up the shortfall to fund replacements, according to the Local Government Association (LGA).

A Treasury Spokesperson says that “The Chancellor is looking at a range of options ahead of the budget, but anything more than that is pure speculation.”

We have recently learned that speculation is often pointless in politics, but BESA and the ECA have called on the Chancellor to take action to support construction SMEs in the forthcoming budget. On Wednesday 22nd we will have our answer and know whether our members needs and calls for the government to tackle prompt payment issues, retentions, clean energy – building on the ‘Clean Growth Plan’, tackling rogue traders and making sure that trade associations play an integral role in finalising the sector deals, have been heard.

In a rare echo, London Mayor Sadiq Khan appears to be in agreement with Secretary of State Javid and has called for the budget to allow councils to borrow for investing in new homes.

With more pressure on our industry and sector than ever to deliver faster, cheaper and to a higher standard, the Chancellor needs to acknowledge the support that SMEs in construction need, and take this budget opportunity to launch that support.

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