Central government has been clear on its targets for housing supply, writes James Barton, partner for City & east London residential at Knight Frank.
As far back as 2015, plans were announced to deliver 250,000 new homes per year nationwide, including 49,000 in London, and 400,000 affordable homes by 2020. While the ambition of these plans was admirable, the word that echoed throughout the property industry was. “how?”.
Just two years on, a combination of two practices is constraining supply and preventing these ambitions from being realised: the allocation of sites as a strategic industrial location (SIL) and a zero-tolerance approach to the release of the greenbelt.
The release of greenbelt land is a more complex issue – where an emphasis should be placed on low-rise, high-quality development with a prominence on amenity and ecology. However, the protection of SIL must incorporate greater flexibility.
The story so far
The GLA is looking to crack down on the conversion of industrial land to residential. Strategic industrial land is already protected under the existing London Plan but current policy allows SIL sites to be released for housing if carefully managed through local plans. The GLA plans to further strengthen protection of SIL sites in a new London Plan to be consulted on later this year.
Last month Cain International and Galliard Homes put on hold their 946-flat, £500m Peruvian Wharf, E16, development after the mayor’s office put it under review despite early positive design discussions with Newham council. The Northfields Industrial Estate in west London, which was bought by Berkeley through its St George arm from SEGRO in April with potential for more than 2,000 homes, is also understood to be threatened by a GLA intervention.
With central government pledging to prioritise brownfield land for development and looking to ensure that 90% of these sites have residential planning permission by 2020, there should be a real drive to get homes built in these locations. Yet the desire of local authorities, and in particular the GLA, to protect redundant – and often disused –industrial sites is completely at odds with national policy.
Developers ready to deliver
The situation seems particularly perverse in cases where there are developers with strong track records prepared to commit to delivering thousands of new homes that would make a significant contribution to solving the housing crisis – and even more so when the scheme achieves policy levels of affordable housing.
Protecting sites as SIL is also highly contradictory to the government’s continued promotion of home ownership. Many of these brownfield sites are in areas with low affordability levels, so protecting this land is not only restricting supply of new homes generally, but also disproportionately affecting first-time buyers and purchasers looking at affordable core locations.
Of course there needs to be a balance, and not all former commercial sites can be developed. Yet combining residential and industrial uses is a poorly thought-through suggestion: it simply does not work from either the residential or commercial occupier’s point of view.
Moreover, it is completely unviable in locations where there is an inherent lack of demand for industrial uses. A level of pragmatism is needed and industrial uses should be promoted where efficient and effective road transport links are already in situ.
A fundamental flaw
There is a fundamental flaw in not only the planning system, but also the strategy of how to provide new homes. On the one hand, there is a key policy to provide a set amount of new homes to increase affordability and home ownership levels. On the other hand, combining restrictive policies such as SIL and non-release of greenbelt land, leaves housebuilders with very few options regarding places in which to develop the new homes we need.
These contradictory policies are compounding the much-talked-about housing crisis by prohibiting the supply of affordable housing, while inflating prices through pent-up demand and fall in supply of new homes.
The conclusion, therefore, can only be one of two things. Either the targets and projected numbers are erroneous, not properly considered and inflated for political PR purposes, or central government strategy and the localised planning system for London are not aligned and simply not fit for purpose.
We must find consistency and account for market-facing views before any real progress can be made.
