A derelict former gasworks near the centre of fast-growing Coventry, home to carmaker Jaguar Land Rover, seemed an ideal spot for redevelopment. A local planning inspector certainly thought so when he recently approved plans to build 700 homes on the site.
But the decision last October came only after several years of negotiations, two refusals and a community outcry. Along the way, the developer, Complex Development Partners (CDP), and the council tweaked everything from the block’s height to its brick patterns — leaving its planning consultant “totally bewildered” by the objections from residents.
Some researchers and commentators were less surprised. They blame so-called Nimbyism — “not in my back yard” — for halting or stalling hundreds of home-building schemes up and down the country at a time of national shortage.
The UK now has a shortfall of 4.3mn new homes, according to one measure, contributing to record rent increases, soaring house prices and 1.2mn people on local authority housing lists.
Not only does this shortage have large and obvious human costs, it is also adding to the country’s stagnating economy, many across the political spectrum agree.
“It’s incredibly hard to get economic growth unless there are spare homes for the workers that growing, high-wage firms want to hire,” says John Myers, founder of Yimby Alliance, which campaigns for more home-building (Yimby is shorthand for “yes in my backyard”).
Lord Simon Wolfson, the chief executive of Next and a Conservative peer, told a panel discussion in December that the planning system puts too much power “in the hands of people who already own” and that it “slows down, prevents and increases the cost of building new homes”.
Both are among a growing number pointing fingers at a planning system that makes it too difficult, slow and expensive to build homes, and other vital infrastructure, in the areas of strong economic growth where they are needed the most.
Ahead of an election likely in 2024, both Labour and the Conservatives are promising reform of planning even though both have failed to deliver it in the past.
Labour leader Sir Keir Starmer — a self-professed “Yimby” — made sweeping changes to how England builds homes a central theme of his party conference speech in October 2023. (Planning is devolved to the Welsh, Scottish and Northern Irish governments.)
Starmer, whose party has a significant poll lead, says he will “bulldoze” through planning red tape in order to not only meet but exceed the target — set by Conservatives in 2019 but abandoned in 2022 after a backbench rebellion — of building 300,000 new homes in England per year. The Liberal Democrats, meanwhile, have set an even more ambitious target of 380,000.
The Conservative housing secretary Michael Gove outlined plans in December that would strip local authorities of their planning powers if they fail to deliver updated development plans. But he stopped short of making government targets for housebuilding mandatory — prompting critics to assert that many authorities will water down plans and approve fewer homes than are needed.
Approvals are already declining following a succession of interest-rate rises, with the number of homes granted planning permission in the year to September 2023 down by a quarter from the same period in 2021, when interest rates were much lower. With two-thirds of voters agreeing that housing issues have worsened under the Conservatives, Labour has an obvious motivation for campaigning on the issue.
The experiences of other countries show that well-crafted planning reforms can make a genuine difference. Planning reform in France at the turn of the millennium has been credited with boosting its supply of affordable housing, while a relaxation of development rules in Japan meant that in some years following the financial crisis, Tokyo alone started building more homes than the whole of England. Both countries, and others, have added far more homes per capita than the UK and countries with similar planning systems, such as Ireland.
But the question in the UK is whether politicians of either party can come up with something bold enough to accelerate home-building to a level not seen since the 1970s without antagonising those whose votes they need to put them — or keep them — in office.
Housing was also a pressing issue 70 years ago. Thousands of homes had been destroyed during the second world war, during which virtually all residential construction ground to a halt. The pent-up demand was significant.
But a largely unregulated building boom before the war had sowed the seeds of a backlash against sprawling suburbia. The result was the Town and Country Planning Act, passed in 1947, which created the greenbelt around London and still shapes planning today. Rather than spreading uncontrolled along roads and railways, development was to be carefully planned in New Towns such as Slough, Harlow and Hemel Hempstead.
Initially it worked; between 1951 and 1955, 1.5mn homes were built. But opposition to more building soon hardened. Green belts were introduced outside the capital and development in England restricted to areas detailed in the “local plans” drawn up by planning authorities, a system that endures today.
Unable to meaningfully increase the supply of greenfield sites, politicians eventually resorted to demand subsidies such as tax relief on mortgage interest or increasing housing density in cities. Neither strategy has delivered enough homes to keep pace with demand.
Planners say they have done as best they can within the confines of the system they inherited.
Across England as a whole, they point out, the majority of applications to build homes are successful. Almost three-quarters of all residential applications and four-fifths of developments of 10 or more homes were approved last year, with little change over the past decade.
“Planners can’t build houses,” says Michael Kiely, chair of the Planning Officers Society, a professional body. “We’ve done our job — a significant amount of applications are granted.”
But that does not change the fact that the supply of land for development is not sufficient and there are few incentives for existing communities to support more development in their locality.
Areas with higher house prices — indicative both of high housing demand and generally wealthier residents — tend to approve a lower percentage of applications to build houses.
The reality may be even worse than the headline figures suggest. Developers increasingly seek out community feedback while drawing up their initial plans for a site and many proposed schemes are shelved as a result, before formal planning applications are even made.
“I’m aware of clients of mine that currently wouldn’t even look at certain districts because the politics of that area make it too difficult to deliver a project,” says Stuart Baillie, head of planning at property consultancy Knight Frank.
This is often evident at planning committees, which decide on the most complex applications and are particularly “susceptible to local interest and lobbying”, Baillie believes. “The types of questions that are raised in the committee . . . can sometimes be completely irrelevant to the planning process.”
The uncertainty is enabled by the piecemeal system of local plans, under which rules and expectations vary widely between even neighbouring areas, some argue.
Anthony Breach, from the think-tank Centre for Cities, describes local plans as “letters to Santa”, amounting to little more than idealistic wish lists. “It’s almost impossible for a development to fulfil every single criteria,” he adds. “Even if you follow the rules, you can still be denied planning permission.”
Larger developments can require as many as 79 supporting documents, from air quality assessments to crime impact reviews, a recent survey found. Meanwhile, almost half of authorities do not have an up-to-date local plan at all.
Others argue that heaping blame on Nimbys and planning officials lets private-sector developers off the hook for a business model that prioritises profit over volume and results in expensive, low-quality homes.
“Reasons for refusals don’t tend to include residents’ objections,” says Elizabeth Bundred Woodward, planning and policy lead at CPRE, a charity which campaigns to protect the countryside.
“Local democracy is really important and public decisions should be transparent,” she adds. “The planning system is there to provide checks and balances on how land is used — some developments should be refused.”
She believes much of the slow pace of housebuilding is because developers do not want to drive down prices, and their profits, by flooding the market with new homes.
Starmer has pledged to clamp down on so-called land banking, where builders sit on land they have acquired for development in the hope that its value rises. Over the past decade, 1.1mn plots with planning permission have not been built upon, claims the Local Government Association. The Competition and Markets Authority is already investigating the practice and is due to report its findings in February 2024.
The eight major housebuilders that dominate the industry, and are all constituents of the FTSE 350 index, certainly own significantly more plots of land than a decade ago.
But Steve Turner, director of communications at the Home Builders’ Federation, which represents private developers, argues land banking is a logical response to an unpredictable process.
“Because [planning] has become so bureaucratic and delayed, you’ve got to have more land so that at any given point you can start building,” he says.
The uncertainty has “particularly blighted” smaller housebuilders, who cannot afford to hold on to a constant supply of land, adds Turner. As a result, the number of homes delivered by small and medium enterprises and self-builders has collapsed in recent decades, particularly since the financial crisis.
Fixing all this is proving particularly tricky for the Conservatives, who must square the concerns of their homeowning Home Counties supporters with the fear that their vote share among young people will vanish entirely if they don’t ramp up housing supply.
In 2015, the government expanded permitted development rights (PDR) to make it easier to convert vacant commercial premises into residential use. But liberalising PDR has added just over 80,000 net new homes since 2015 — or 6 per cent of the total supply — and many of those have been found to be of very poor quality.
More recently, Prime Minister Rishi Sunak has declared his planning policy to be “brownfield, brownfield, brownfield”, vowing to protect “precious” greenbelt land.
In theory this will make redevelopment more palatable by keeping it away from leafier areas. CPRE says 1.2mn homes could be built on such land, 45 per cent of which already has planning permission.
But even if all those homes were built, they would meet less than a third of England’s housing needs over the next 15 years, a 2022 report by planning and development consultancy Lichfields found. And it is far from certain they will be built; much of the land is either contaminated, lacks local infrastructure or is not in places people want to live.
Labour also wants to make use of brownfield sites, but has additionally said that it will allow building on the so-called grey belt — waste sites on the greenbelt. Alan Mace, a lecturer in planning at the London School of Economics, agrees that this makes sense.
“The land is close to existing cities, so it’s where you’d want to build,” he says, adding that the public tends to think of the protected space as being all green, which it is not. This proposal would be “an interesting way to reframe [green belts] as less sacrosanct and release more land for home-building.”
Starmer has also proposed the creation of several new towns on land bought under compulsory purchase orders. But this would require revising a 1961 law that obliges the buyer to pay a price that reflects the value of land with planning permission secured, rather than its market value without such consent. This “hope value” can be on average 275 times its agricultural value.
Mace says building new towns would still be “very expensive” even if the land could be bought much cheaper. “You’ve got to run new roads, sewerage and electricity to somewhere in the middle of nowhere,” he adds.
It is also painfully slow. The UK’s first garden city in a century, in Ebbsfleet, Kent, was announced by former chancellor George Osborne in 2014 but will not be complete until 2035.
The enthusiasm for new purpose-built towns signals Starmer’s intention to make more centralised decisions about where homes should go, in contrast to the localist approach of the current government.
But first he needs to win an election. Private renters, at the sharp end of the housing shortage, are significantly more likely than other groups to say housing policies will influence their vote, according to a poll for housing charity Shelter. But on average just a fifth of households in Labour’s target constituencies are privately rented.
Two-thirds are owner-occupied, meaning that Labour could face the same challenges that the Conservatives do when it comes to boosting housing supply.
“The local politics of how to grind through from setting out the big splash to how it’s actually played out in policy is really tricky,” says Edward Clarke, lead researcher at Lichfields’ think-tank.
“Local MPs [may be] worried about supporting something they feel is being imposed on areas which actually don’t want to build huge amounts of housing.”
Giving regional mayors more sway over planning, another of Labour’s ideas, might help bridge the gap between what locals will accept and nationwide housing needs, by forcing local authorities to work together.
But there are many ways in which policymakers could be even bolder.
Vienna has kept housing costs down by making government-subsidised homes widely available for rent. But the Lib Dems are the only major UK party to have set a national target for building social homes.
Unlike many European countries, the UK lacks rules-based zoning, a system that preapproves different construction types within particular areas along with the infrastructure needed to support them. Developments that tick all the boxes are automatically given the go-ahead.
“These aren’t crazy ideas,” says Breach. “They are simply things that most other developed countries have.”
Zoning has proven successful in other countries. Auckland in New Zealand faced similar housing challenges as England before it forced councils to allow denser home-building in 2021. Since then, home permissions have shot up fivefold and rents have stabilised.
“The stuff Labour’s proposed is broadly good, but it’s all short term,” adds Breach. “It might buy us time, but in the longer term we need to be thinking about bigger changes that would make Britain a more normal country for housing affordability.”
