With this parliament coming to an end, how would you assess the coalition government’s performance on house building?
The government has clearly been keen to try and get housebuilding delivery back on track in the aftermath of the recession and consequent falling off of housing production. We have had the NPPF, which most developers are now getting used to and is seen as a positive. Increasingly, local authorities are being held to account over the status of their local plan and 5 year land supply, and it will become harder for local authorities to resist development where there is no clear reason for housing to not come forward. We would not like to see the NPPF rolled back by any incoming government and a knee-jerk reaction is not what the industry needs right now, as it is still in fragile health.
What are your key ‘asks’ in the party manifestos on Right to Buy?
Right to Buy, reinvigorated by the current government in 2012, is widely supported by parliamentarians, the public and the industry. While we haven’t made any specific reference to the policy in manifesto, our ‘asks’ relating to Right to Buy in the party manifestos are to ensure that similar incentives can encourage councils and housing associations to develop new affordable housing. Any future push for new housing in the next parliament must include specific policies to encourage new affordable and part-rent, part-buy housing.
What about planning law and regulation?
Planning will always be with us and we have asked for a simplification of the pre-application and reserve matters processes, because it is here that members see lengthy and costly delay. CLG were talking about central guidance for planning officers on acceptable pre-application and reserve matters condition-making, and we would welcome this.
Regulation still presents problems and in the last year we have noted increasing uncertainty around regulations on energy performance, drainage and water connections. Urgent clarification of the government’s position on these is needed before we enter the purdah period. As it stands, many members face a sudden tightening of regulation in – say – energy efficiency for which skills and supply chain are not prepared. At the moment the industry is struggling to get enough bricks – things are rather hand to mouth!
How would the removal of the local authority borrowing cap help SMEs?
Lifting the local authority borrowing cap and freeing councils to build is key if the next government wants to pursue an inclusive agenda on new development. Not only would the investment be very low-risk and paid many times over by future rents but it would be a clear signal that the next government is serious about localism.
By devolving power and responsibility to local authorities, it is the NFB’s hope that this will encourage councils to procure new housing in ways that maximise local benefits and ensure fair access for smaller house builders and developers.
How can the next government simplify public sector procurement?
Public procurement has the potential to be the means by which local and central government boost skills, ensure small businesses can access public work and improve outcomes for the client while reducing costs. However, in order for this approach to made smarter and leaner, central government must continue to refine and improve the procurement process through the mandating of standardised contracts and ensure a clear pipeline of work to help develop the right skills.
What about measures to boost institutional investment in home building?
We have long argued that housebuilding suffers from a stop/start approach to finance, both in terms of mortgage borrowing and lending for development capital. This position has been born out by the way the sector has suffered during the recession – the first to slow down after the banking crisis and now the last to pick up. The reasons for this are complex but essentially development is seen as high risk so banks won’t lend; the same banks are now imposing new conditions on mortgage borrowing so reducing sales at the delivery end. The only way out of this cycle, which recurs every 15 years or so, is for institutional investment to take a greater interest in the delivery of large scale housing that is built as part of an investment portfolio for pension or similar patient capital fund. The government could stimulate this nascent investment initiative through the creation of tax vehicles (such as REITS) but so far has shown little interest to do this for housebuilding. We need another model, and NFB are looking for partners to move this forward.
Finally, what tax changes would boost your sector?
The NFB is a key supporter of the Cut the VAT coalition, an alliance of over 60 charities, trade associations and business groups calling for the next government to reduce VAT on housing renovation and repair work from 20% to 5%. In one single measure, the government could help tackle the cost of living, boost economic growth and employment while reducing rouge traders in the construction industry. There is a strong body of evidence in support a VAT cut and if the new government wants to enact a popular but targeted tax cut quickly, then this should be strongly considered.
Richard Beresford, chief executive, National Federation of Builders
For details of the party conference events being jointly hosted by the NFB and National House Building Council,
click here.