"The current planning system is not fit for purpose, and any momentum on reforming planning law has all but utterly dissipated as housing ministers have come and gone."
However, whilst wider economic factors have caused ebbs and flows, the underlying and far more serious issue facing the housing market remains the chronic lack of housing supply and the vastly widening gap between the homes we need and the homes that are actually being built. This has had, and will continue to have, a far greater effect on all corners of the market, and more immediately the rental market, and it is a problem rooted in government leadership more concerned with pandering to its backbenchers and with its popularity than doing what is right for the country and the housing market.
The lofty promises of previous conservative governments to address the housing crisis included ambitious targets for new homes, including a commitment to building 300,000 new homes every year by the mid-2020s, and more immediate legislation to allow the addition of two extra floors on certain buildings in areas where housing is needed most.
There was a sense of refreshing optimism when these policies were announced. For landlords, this promised more available properties and greater opportunity in the buy-to-let market, which could then be passed on as more affordable rents for tenants.
These promises were short-lived. In the space of mere months, the policy of 300,000 houses a year was scrapped, and the government withdrew support for legislation around additional floors.
As a result, rather than getting legislation that would have provided permitted development to add floors and create new homes, we are instead seeing councils reject applications for building additional floors on purely subjective grounds, including in areas where new homes are desperately needed.
Moreover, the appeal process for rejected applications is overseen by judges appointed by the secretary of state, who in the vast majority of cases align with the government’s stance of not supporting the development of new floors. Overall, this has cost developers, especially small and medium-sized developers, enormously.
Moreover, the tune in government policy has shifted from supporting housebuilding efforts that would provide more rental opportunities and encourage a properly functioning market to simply squeezing landlords as far as they can, which has caused many to cash in and leave the market.
With this backdrop cast, we have seen rents rise considerably in the last 3-6 months amid wider economic pressures. Despite the rent caps put in place for social housing, with many people affected by the ongoing cost of living crisis, we’ve seen that would-be tenants who cannot afford rents will simply stay at home.
The only solution to the issue is for the government to stop pandering to anti-development NIMBYs and provide an impetus for local councils to support development. The idea of rent caps for the private rental sector has been floated, but this won’t magically produce more homes, it will only create a black market, which would detrimentally affect tenants, much the same as the withdrawal of tax relief for landlords has had the unintended consequence of putting rents up, which ultimately hits the pockets of tenants.
Nonetheless, despite these challenges, rental properties remain an attractive and good investment. The increased risk on rental investments and the minefield of changing legislation that we’ve seen landlords face in recent months has also served to highlight the importance for landlords to instruct property professionals that can be trusted to protect their investments and ensure rent cover in these uncertain times, as self-management can be a false economy.
Having mentioned policies that are short-lived, the question ‘who is the housing minister?’ is quickly becoming the nation’s favourite Trivial Pursuit question. There are no guarantees that in the time it takes to read this article, we will not see a new minister appointed.
It is simply ludicrous that in the past seven years, there has not been a housing minister in post long enough to see a development fully through the planning system. This is further demonstrable proof that the housing brief is bottom of the government agenda, and there has been a serious failure in leadership to take control of what needs to be dealt with in the housing market.
The current planning system is not fit for purpose, and any momentum on reforming planning law has all but utterly dissipated as housing ministers have come and gone. It is currently the hardest period in the last 50 years to get planning permission for new developments or to expand existing stock, exactly at the time when we need it more than ever.
The government has also halted the Help to Buy Scheme, making it incredibly difficult for first-time buyers to get on the first rung of the ladder, and with the shortage of supply falling further and further behind a growing population, that rung is rising further and further out of reach for many.
The disparaging reality is that our children are approaching a housing market where landlords are forced to keep rents high, and the prospect of buying a house is falling further out of reach for young people. What we’re left with is the question ‘where are our children going to live?’
The government must step up to the plate and lead from the front to enact effective and fast reform to the planning system to encourage a boom in new housing stock. Let’s hope the latest minister to take up the seat can prove she is up to the challenge.
