1.  The overall scale of housebuilding required

  1.1  This begs the question: required for what?

  The DPM seems to be concerned with three issues:

—  the high cost of housing in the South East;

—  housing targets are not being met;

—  the need for more "affordable" housing especially for key service workers.

  1.2  For the purposes of this paper I've assumed that the South East is the area covered by Regional Planning Guidance 9 counties of Essex, Hertfordshire, Bedfordshire, Buckinghamshire, Oxfordshire, Berkshire, Hampshire, Surrey, East and West Sussex and Kent (plus Unitary Authorities), plus Greater London. Population of this "Region" is around 18 million, (including London—7 million). At a rough estimate this equates to some 9 million existing homes. These are being added to (excluding London) by approximately 40,000 homes per annum.

  1.3  The DPM's Statement suggest adding 200,000 extra homes to that, concentrated on four growth areas. The period for accommodating these is not given but if I assume 10 years, that would add another 20,000 per annum, a 50% increase to building rates but, after 10 years, would add just 2% to the housing stock of the South East.

2.  What would be the effect on house prices?

  2.1  Assuming that 5% of existing housing stock is traded each year then, 450,000 homes would be traded, RPG 9 adds 40,000 to that (8%) and another 20,000 per annum suggested by the DPM would add 4% more. Others may give specialist evidence on what effect that may have on house prices, and evidence on annual turnover of housing stock in terms of sales. My economics studies ended at `A' level, but increasing supply by 4% in any commodity would not, I suggest, have a dramatic effect on prices.

  2.2  Conclusion: even one million additional houses over 10 years would be unlikely to have a dramatic effect on house prices. Clearly, there are other reasons why these are rising so fast (eg low interest rates, rising incomes, investment in housing more attractive than savings or stockmarket). It cannot be the numbers available.

3.  Are current house building rates sufficient?

  3.1  A second point has been suggested, that housing targets are not being met, ie that the 40,000 planned extra homes are not being built in sufficient numbers. Even if this were true (which it is not, Essex house building rates at least are in excess of that envisaged in RPG 9 and the adopted Structure Plan) adding to the allocation of land for homes will not make the house building industry build faster.

  3.2  There is no evidence that current allocations are insufficient to meet planned levels of growth.

4.  How can more "affordable homes" be provided?

  4.1  The planning system already provides approximately 10% of all new homes as affordable homes. This is achieved by planning agreements on larger sites to require developers to provide this subsidy. Many may argue that this is as much as can be squeezed from the system. There are other contributions required from developers eg new access roads, schools, community centres, even a new station for one development I know of in Essex.

  4.2  Much higher levels are probably needed, especially in view of escalating house prices in a climate where service workers incomes are relatively static. Private house building is unlikely to deliver the numbers of affordable homes required. 10% of 20,000 per annum (200,000 over 10 years) would add 2,000 a year—for a total population of 18 million.

  4.3  There must be more fundamental changes to the way that affordable housing is provided eg a return to Local Authority provision, adequate funding for Registered Social Landlord (RSL) provision, state subsidy to housebuilders.

5.  Is the proposed distribution in the four growth areas appropriate?

  5.1  Two of these areas are partly within Essex—London/Cambridge corridor and Thames Gateway.

  5.2  The London/Cambridge corridor awaits a decision on the growth of Stansted Airport. Consultation on the Future of Air Transport (DfT) proposes up to three extra runways providing a capacity approximately twice the size of Heathrow. Should that happen, and there is no clear Government direction on how this will be adopted through the planning system (Regional Planning Guidance? Planning application and Inquiry?), then additional housing will be required in massive numbers.

  5.3  The DfT report has estimated that some 93,000 jobs will be created, but this ignores "catalytic" jobs (other business attracted to the area). Consultants for Essex County Council have estimated that 133,000 jobs could be created in total. They suggest that a similar number of extra homes would be required (assuming one worker per home).

  5.4  Any decision on extra housing for this corridor needs to be delayed until the position on the airport is clear, or else there could be a "double whammy".

  5.5  Thames Gateway was proposed as "a regional and national priority for regeneration and growth" in RPG 9, "a vital opportunity for creating more sustainable forms of development in the future".

  5.6  Part of the problem in South Essex is the relatively high level of unemployment, and the daily pattern of large numbers of commuters travelling in and out of London. The aim is to provide more local jobs, not just for the unemployed, but to create "sustainable communities" where travel is minimised. Adding large numbers of houses to the already adequate (for local needs) provision would exacerbate the problem of larger numbers commuting and do nothing for the unemployed.

6.  The levels of decision taking

  6.1  Housing numbers are already prescribed by Government through the Regional Planning process. There is opportunity to challenge this through the Regional examination in public (an inquiry into the draft guidance). This is fair and acceptable.

  6.2  This is further broken down through the current planning system by structure and local plans, each with an inquiry allowing examination of the effect of the overall numbers, would be on District and Local Areas. This is similarly fair.

  6.3  The alternative would be imposing these numbers in a fast track process and expecting the planning system to deliver without public scrutiny. This would surely alienate local communities. Withdrawing that right to a hearing may be contrary to human rights legislation.

  6.4  ODPM has recently issued guidance that housing developments must be at a higher density and those proposals falling below a threshold should be referred to that department for decision. Higher densities have advantages in providing more homes on less land (avoiding urban growth) but disadvantages in terms of the potential for overcrowding and quality of life. I suspect that the system could become unworkable if too many proposals were referred. Choices must be made between over-cramming developments and saving land for its own sake—regardless of quality. I suggest this is a decision better taken locally.

7.  Conclusion

  7.1  These views are my own, not necessarily those of my Authority. A convincing case has not been made that 200,000 extra homes in the South East would have any discernable effect on house prices nor the provision of affordable homes. The environmental consequences of possibly increasing the numbers of new homes to be built, by 50%, are not detailed by me, but can be easily imagined. In my experience steering the planning system through the process of providing the current level of 40,000 homes is difficult enough if local concerns are to be addressed. Adding 50% to the numbers would make that task obviously much more difficult.

  7.2  The "growth areas" in Essex both have problems in accommodating additional housing (leaving aside environmental issues). In the Stansted corridor we must await the outcome of the potential airport expansion before a decision on housing can be taken (to avoid a decision taken without an adequate context and to avoid a "double whammy"). In Thames Gateway the problems are unemployment and commuting, neither "sustainable" and would be made worse by extra housing.

 8 November 2002