Founded in 1976, The Berkeley Group has been a quoted company on the London Stock Exchange since 1985. It is now one of the UK's leading high quality development companies, known best for its domestic housing projects operating under brand names such as Berkeley Homes, St George, St James (a joint venture with Thames Water), Crosby Homes, Thirlstone and St David.

  In line with government strategy, the Group leads the way in urban regeneration in England and Wales. Over 90% of its units are built on urban and brownfield sites including undertaking an increasing number of mixed use schemes and GLA records show Berkeley to have been the largest residential developer in London 1995-99.

  For these reasons we believe our experience may aid the Committee's research and I respond in accordance with the particular questions posed by the committee.

  Brian Salmon is Berkeley's Group Planning Executive and has led the company's planning and design function for 24 years.

  In direct answer to the questions posed the following observations may assist your Inquiry.

THE OVERALL SCALE OF HOUSE BUILDING REQUIRED

Need?

  Several assessments need to be made to establish the whether the Government's proposals to achieve sufficient house building levels are adequate.

  The period between 1981-2000 saw an annual deficit in housing provision compared with household formation of 31,000 per annum nationally. The figures show this to have been an escalating figure reaching 56,000 per annum by the year 2000.

  To rectify this position we need to build a shortfall of 600,000 dwellings to catch up with the housing position in 1981.

  Looking forward household formation rates are continuing to grow.

  The 2000 based population projections suggest a newly arising need for some 210,000 new dwellings per annum to satisfy the need. (JRF)

  If we assess a catch-up period of 10 years to make good the 1981 situation this will require 60,000 new dwellings per year.

  Thus a clear need of 270,000 dwellings per annum is forecast for the next 10 years and probably not less than the 210,000 per annum thereafter.

Supply?

  The current fairly stable annual build rate is about 150,000 dwellings per year. This figure has gently reduced to provide the lowest build figure for 75 years in 2001. During this period of price rise and good housing markets, the industry has struggled to even maintain its level of house building and our experience has shown that this has arisen because a shortage of financially viable, sustainably located building land being released through the planning system.

  Looking to the future we need to identify not only sufficient land to maintain the existing output of 150,000 per annum but also to find an additional 60,000 per annum to catch up with living standards at the 1981 level and a further 60,000 per annum to cater for future demand, (270,000 per annum)

  The 200,000 dwellings proposed in the Government's statement of 18 July are located for the most part some 60 miles from London and will require substantial research to establish their suitability in both Environmental and Sustainability terms (Stevenage is a case in point). If these issues can be satisfied substantial investment in infrastructure will be required.

  Whilst these additional units will be very welcome if they survive the planning process they only represent 10,000 dwellings per annum and are spread around four or five locations and represent less than 4% of the annual requirement.

  By far the most important aspects of the statement would be those that address how the remaining 96% are to be provided.

  I have looked at the 31 bullet points explaining the essence of the green paper proposal and all are procedural. No policy statements are incorporated which state that they are aimed at increasing the supply of housing land, just rhetoric in the speech. Some of the proposals are clearly counter productive enabling planning authorities to refuse to deal with applications, which currently they would be required to process. Others restrict the right of the applicant to appeal in circumstances where he is currently able and yet another shortens the period of permission. All of these points are counter productive and will hinder the release of land Additional consultation procedures are proposed and new requirements prior to submission are proposed which will lengthen the time it takes for a planning proposal to pass through planning procedures.

  I am not confident that the proposals will address the supply of housing land.

  There are other negative impacts on housing provision that I explore in the answers to other questions.

WILL THE PROPOSALS SIGNIFICANTLY REDUCE HOUSE PRICES

  House prices are highest in London reflecting the highest area of demand. Statistics by the Building Societies are showing that increases of 20% over the past year have occurred and that the average house price in London now exceeds £200,000.

  The land releases for housing in Milton Keynes, Cambridge/Stanstead, Ashford and the Thames Gateway will need to be based on sustainable transport and employment criteria.

  The overall figure of 200,000 houses in these areas spread, as it will be over some 10 years will provide 5,000 houses in each location each year. This may stem price rise in the immediate local markets.

  The market to which extra provision needs to be supplied is that which serves the major employment base of London. Whilst the PPG3 requirements to re-use sustainable urban land at higher densities offers the policy background to make an impact on this market nothing in this green paper advances on the PPG3 criteria. It cannot therefore be expected to have any impact on house price rise in the Capital.

  The Housing provision in the Mayor's plan for London is predicated on the requirement that 23,000 houses be provided per year directed by government guidance in RPG9. Current provision rarely exceeds 12-15,000. The Mayor's plan does not indicate how more land will be brought forward to achieve even the continuation of the 12-15,000 housing. This is left to later negotiations through Local Plans. Writing targets without providing the mechanisms to achieve them is pointless but seems to be a straightjacket imposed by the plan led system.

  Sustainable redevelopment of brownfield sites with mixed development proposals near to the main employment base of London would be more likely to take some of the heat out of the London Market. This could also lead to a reducing the percentage price rise across the country.

  To have a dampening effect on price rise such provision would need to be aided by a fast track planning procedure to ensure rapid permissions in urban locations that were sustainable in both transport and educational terms. Perhaps these fastrack permissions could be directed through supplementary planning guidance enabled by the imminent circular review following the green paper response.

  The green paper proposals are neutral to house price matters in so far as they provide no policy support for housing provision.

  In reality both the implications for increased social housing provision enshrined in the green paper and the forecast reviews of circular 6/98 and 1/97 to put new policy initiatives in place could put all housing supply at risk. Currently the meagre supply relies on for the most part on 25% on site provision supported by grant. The system also relies on all the smaller sites being exempt from the requirement. If, as is predicated by some commentators, the threshold were reduced so that small developments become liable to the levy, the tariff would have been reintroduced by stealth. This would make most small redevelopment's uneconomical overnight.

  I urge the Committee to look at this issue and report on its significance to overall housing supply.

GEOGRAPHICAL DISTRIBUTION

  Latest research shows that London and the South East and South West of the country are suffering the major increase in population with even cities as vibrant as Manchester losing population to the South.

  This implies that the South is still seen as the best location for jobs and that the market pressure is prioritising southern locations for new housing. The Deputy Prime Minister's view that new larger areas for development are needed in the South is in sympathy with this broad market pressure.

  However it is Berkeley's experience that key regeneration projects can pump prime broader regeneration in city centres. Crosby's Brindley Place Residential scheme in the centre of Birmingham is a clear example of this type of regeneration achievement changing the cultural character of an area.

  The Deputy Prime Minister's Urban Summit is rightly located in this area of spectacular regeneration.

PROMOTE HIGH QUALITY SUSTAINABLE URBAN COMMUNITIES WHILST AVOIDING POORLY DESIGNED URBAN SPRAWL

Sustainability?

  The planning green paper promises to provide a more sustainable future requiring sustainability appraisals for LDF's.

  These will emanate from the new policy thrust "planning for a purpose". The Deputy Prime Minister proposes that a statutory purpose for planning be included in any new legislation. The suggestion is that a duty be placed on all those responsible for carrying out functions under the planning acts to have regard to the need to achieve sustainable development. We are perhaps to wait for national planning guidance on this matter.

  Whilst the intent to provide a sustainable agenda is stated in these words it is worrying to look at the time scales implicit in these intentions.

  1.  Legislation for LDF's to occur. (This Session and how much legislation?)

  2.  National Planning Guidance to guide the sustainability agenda.

  3.  Community Strategy to guide the LDF.

  4.  Three-year project plan comprising:

—  Commencement of LDF policy preparation

—  Sustainability appraisals for LDF strategies

—  LDF preparation

—  Public Hearings

—  Adoption of LDF.

  Unless this process is drastically foreshortened, policies which provide sustainable solutions to house building are going to take years before they become operable.

  The Government's green paper aims include the aim to "deliver in a sustainable way government objectives such as housing".

  Unfortunately no mechanism is suggested which will address the current crisis by and identifying new housing land in the short term.

Urban Sprawl?

  The prevention of urban sprawl has for the past 50 years been effectively controlled by the introduction of Green Belts.

  The issue now is more one of identifying areas for new housing as Urban Extensions.

  Development control policies for these areas could include the requirement that master plans be produced by applicants for large schemes to achieve sensitive close knit urban forms with a mix of dwelling types, heights and building designs. When a scheme is submitted a judgement can then be made as to whether the proposal represents these aims. This process should not be restricted to planning authorities as part of the LDF and policies within the LDF should be flexible enough to enable review of Urban Fringe Land as part of the processing of a planning application.

Millennium Villages?

  Millennium Villages were originally proposed for two badly contaminated areas at Greenwich and Allerton Bywater.

  The concept was that they were model sustainable communities.

  The first at Greenwich was in a readily marketable location with government investment in the Jubilee Line aiding the regeneration. This location will stand the additional costs involved in a sustainable agenda.

  The sustainable agenda proposed for these villages is as set out in a research summary issued by the ODPM (Number 30 2000) as follows:

—  Resource consumption be minimised.

—  Local environment be protected and enhanced.

—  High Design quality.

—  Residents should enjoy a high quality of life.

—  Equity and social inclusion should be increased.

—  Participation in governance should be as broad as possible.

—  Should not require public subsidy.

—  Should perform high on all seven not trade one off against another.

  To score highly on quality of life a good employment base is required nearby to ensure that sufficient money is in circulation.

  A low score on this item makes the Millennium Village a non-starter.

  The best locations for new "villages" can be identified by firstly identifying employment growth areas. Perhaps the Stansted/Cambridge corridor is a case in point.

THE BALANCE BETWEEN HOUSING FOR SALE AND SOCIAL HOUSING

  The main problem identified is that the affordable housing, that was once being provided by new council housing is not now being replaced by Housing Associations or by the provisions of planning gain.

  Firstly the House Building Industry and now the whole Development Industry is being asked to shoulder this whole deficit.

  Housing and Affordable Housing Provision are the responsibility of the Government but the house building industry has shown that up to 25% of new housing can be affordable when supplied on larger sites subject to other planning gain issues not being excessive and an appropriate social housing grant figure being provided.

  However, as one moves from 25% towards 50% simple economics demonstrates that the cost of providing affordable instead of private housing progressively reduces the residual land value.

  This effect reduces the propensity for the site to come on to the market because progressively the existing use or alternative uses become more viable or the owners may decide to shelve the site for another decade when better opportunities might be possible.

  Purchasers of the highest price units may decide that the social content of a scheme has become too high to reflect their aspirations. If this happens the highest prices become unachievable which reduces the ability to cross fund affordable housing.

  Previous attempts by the state to capitalise on development land value have failed. The first in 1947 at 100% was repealed in 1953. The second at 40% by The Land Commission in 1967, and the third Development Land Tax in 1976 were all repealed through the resultant shortage of land.

  I believe that rising house prices and the reducing figures for affordable housing starts demonstrated by the Government's statistics show that a shortage of financially developable sites is resulting as planning gain in the form of affordable housing moves up the percentage scale.

  I believe that this downturn in land supply is not inevitable and I suggest one way forward, by which the Government could address this situation.

  The Government should grasp the development opportunities available from Urban Regeneration, which were sparked by the Urban White Paper. Berkeley and others have proved that this is a viable development format.

  New Policies should be proposed, perhaps through a revised PPG1 to prioritise the redevelopment of brownfield sites. These policies should be extended to a presumption in favour of their development subject to various criteria.

  An Increase in the amount of government funding for both remediation and affordable housing is essential. (The government's additional funds here are very welcome and will help in the short term.)

  A significant increase in the overall land supply situation is needed so that the affordable total can increase proportionately.

  The 25% percentage figure for affordable housing will ensure certainty and therefore encourage the industry to raise the level of production.

  The introduction of shared ownership is helpful because it can often be delivered with substantially lower level of grant whilst generating the same return to the developer

  Thus the development industry would be able to assist in reversing the downward trend and begin the process of providing economically viable affordable housing.

  Unfortunately nothing in the Government's Green Paper or Planning Obligations Paper is designed to achieve these objectives.

THE EXTENT TO WHICH DECISIONS RELATING TO HOUSING INCLUDING NUMBERS DENSITY AND TENURE SHOULD BE TAKEN BY CENTRAL AND LOCAL GOVERNMENT

  Decisions relating to the total number of houses and their broad distribution must remain with central government because no other organisation can see the big picture.

  The proposal by the Mayor to require minimum targets could be adopted by central government in present circumstances to help kick start development. Placing a cap on figures at a time when the need is to increase both housing and affordable housing makes no sense and is clearly counter productive.

  The sustainable approach to development prioritises the re-use of existing urban land at higher densities. At the same time there is often a pressure from within the suburbs to retain the existing low-density characteristics. If energy is to be saved as part of the sustainable agenda higher densities are essential for new development. It is part of the Government's responsibility to monitor and guide the sustainable approach; it must therefore retain its policy platform. One cannot help but reflect that the percent that new property plays in the overall housing equation is minimal and a far more effective policy on sustainability would be achieved by addressing insulation in existing housing.

  The question of tenure is more difficult. Nationally we have Labour and Conservative proposing diametrically opposite policies on the right to buy. With new development in mind the house builders would prefer to retain control over the percentages against a sophisticated range of affordable options for essential occupiers.

SUMMARY AND RECOMMENDATION

  Drawing from the evidence the overall scale of housing required in the southern half of the country is unlikely to be achieved with governments current planning proposals because the machinery does not promote the provision of housing.

  Those aspects that might marginally increase supply are far outweighed by the negative restrictions in the Green Paper. In particular I refer to the requirements for social housing and planning gain, to the additional complexity proposed, and to the onerous restrictions on submission of planning applications and appeal opportunities.

  I can see little effect on house prices except in the isolated locations where additional housing is forecast because no general policies to increase housing supply are incorporated in the Green Paper or anywhere else.

  Sustainable communities are a possible way forward where the necessary components are to hand or proposed (Transport, Employment, Market Need)

  Masterplan principles expounded at government level could help in creating interesting attractive locations, but I doubt the value of Local Authority devised masterplans because commerciality is an essential ingredient.

SUGGESTIONS

  That the Government be encouraged to issue an addendum to PPG3 which could heavily reinforce the re-use of brownfield sites to provide new housing.

  This to provide a structured policy support for a presumption in favour of redevelopment for housing which was soundly and clearly based on both sustainable criteria (including the supply of affordable housing) and the urgency to find solutions to the housing supply problem.

  And to incorporate a fast track planning procedure for projects, which can be demonstrated to comply with a shortlist of sustainable factors.

  This to be supported by an appeal system which was automatically activated in parallel if fastrack time scales were not being achieved by the Local Authority.

B N Salmon, Dip TP, MRTPI

Group Planning Executive