Richard Bacon MP: Put customers in the driving seat to transform the ‘sclerotic’ housing system

Posted On: 
6th December 2018

Our broken housing market is failing to meet aspirations, warns Richard Bacon MP, with the UK remaining an outlier in the custom and self-building housing market.

Richard Bacon MP warned consumers are left feeling disempowered with many people thinking that they have no real say over what and where new housing gets built.
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Speaking at the Federation of Master Builders’ British Building Conference, Chair of the All Party Parliamentary Group on Self-Build, Custom-Build and Independent Housebuilding, Richard Bacon MP, said that our housing market is broken because of failures to meet aspirations and demand.

He said the current housing system was “sclerotic”.

The MP explained that in a competitive economic ecosystem, consumer choice and low barriers to entry would create a healthy economic model – something which does not currently happen in the housing market.

Mr Bacon warned consumers are left feeling disempowered with many people thinking that they have no real say over what and where new housing gets built.

The MP for South Norfolk said the lack of desirable housing is reflected in new figures by the Home Builders Federation, the trade body for volume house builders, which revealed that 67% of respondents “don’t want to buy its products.”

He said the customer must be put “in the driving seat.”

To do this, the MP proposed that local authorities should facilitate a market for serviced plots of land, whereby through public and private sector cooperation on a large scale, people would be enabled to “do what they want rather than what other people tell them that they want.”

Bacon explained that he thought most people would prefer to buy a serviced plot and subsequently commission and design their own home.

Role of SME housebuilders

The Conservative MP for South Norfolk presented research which showed that 61% of us would like to build a house some point in their lives, 30% would like to do it in the next five years, 14% are currently looking at how they can finance it now and a million people who want to start in the next 12 months.

In doing so, he said, most people would not themselves become self-builders. It was more likely they would be self-commissioners and that most of these houses would be built by SME builders.

Nicky Morgan MP, who spoke at the Federation of Master Builders evening reception, said SME housebuilders were “incredibly important” and she emphasised the “major role” they will play in helping to deliver the houses of the future.

Citing a recent FMB report which showed how access to finance was a major barrier for SME’s in the sector, the Chair of the Treasury Select Committee said access to finance was a still a major barrier to SME housebuilders alongside access to land and the complexity of planning system.

Consumer choice

Richard Bacon explained that his proposals, which would see significant participation from SME housebuilders, would provide choice to consumers and “be good for families, great for community cohesion, great for a sense of community.”

Describing the types of groups in society who may benefit from such schemes, the Conservative MP said, “an association of individuals could easily be, the governors of a high school looking to use serviced plots for recruitment of teachers, it could be the directors of a social services who are looking of use land to recruit managers, it could be a group of people helping veterans.

“It is much greener. It empowers the vulnerable. It l can look modern or classical or traditional. Local authorities can get as involved in design codes as they wish.”

Presenting evidence of similar schemes in the Netherlands, where the Dutch have doubled their rate of self-build in just 10 years, he said “we are the weird ones, we are the outliers. This is normal across the developed world.”

He said the pro rata equivalent for UK compared to what the Dutch have achieved for their population size would be the equivalent of building 60,000 units a year.

Planning overhaul

The Conservative MP for South Norfolk stated that there are lessons to be learned from overseas, where planning systems work “more sensibly”, financial institutions are “supportive” and councils “routinely facilitate” these types of developments.

Also speaking at the event, Lord Wei of Shoreditch emphasised the need for an overhaul of the planning system and presented the case for short-term and interim planning opportunities, that would allow communities to try housing schemes out in their neighbourhood without long term commitment.

He called on the sector to take inspiration from the automobile industry and create a culture where by people are empowered ”to try things and fail”, historically a model which has been difficult for the housing sector. 

The comparisons with the automobile sector were also taken up by Richard Bacon MP, who determined that “if it were as easy to get [a serviced plot] as it is to go into a Ford dealership, we would go a long way to solving the housing crisis.”

Also speaking at the session, Huw Edger, Interim Head of Policy at RICS emphasised the need to embrace innovative approaches, citing particularly the concept of modern methods of construction, but warned that this was “not the panacea” but would form an “important part of building a better future.”

Lord Wei said that modular construction would create opportunity to “try before you buy.”

The self-build register

To achieve the transformation in the sector as he described, Richard Bacon MP called on builders to get their would-be customers to register on the councils self-build register.

As set out in the Self-Build and Custom Housebuilding Act 2015, local councils are now required to keep a register of individuals and associations who want to get a plot of land a build a house.

Alongside this, the Housing and Planning Act says suitable planning permissions must be given to meet demand. The level of demand is evidenced by the register.

Therefore, he explained, “the more people who register, the greater the legal obligation on the local authority to provide extra suitable commissions to meet the demand on the register.”