Smith Square Briefing – The Lyons Report

16 October 2014, Blog

The Labour Party released their much-anticipated Lyons Housing Review today, setting out plans to increase house building to 200,000 homes by 2020.

Of course, this is all prospective and completely dependent on whether Miliband and his party get into power following the election in seven months’ time.

The report recommends changes to current planning rules which would increase the supply of new homes. The report is the work of months of hard work from Sir Michael Lyons on behalf of the Labour Party.

In the wake of its release, the British Property Federation has called on all political parties to undertake similar reviews. Liz Pearce, chief executive of the Federation, said of the review: “The sensible review is extremely comprehensive and pinpoints exactly where problems in the planning system are and comes up with thoughtful solutions.” It will be interesting to see whether the other parties respond in any way to the report.

Labour said the report would make it mandatory for local authorities to have a local plan to meet the housing needs of the local community. There will also be financial incentives in place to local authorities so that they deliver a programme of new Garden Cities and Garden Suburbs to unlock 500,000 homes. This incentive has been met positively from some of the country’s leading property experts. Stewart Baseley, executive chairman of the Home Builders Federation said of the report: “We welcome the commitment by Labour to increase housing supply…Policies that would result in more land coming forward for development more quickly and further assist first time buyers would clearly provide a boost to housing supply.”

Other policies include:

  • Measures to drive competition in the house building industry, increase capacity, and expanding the number of small firms
  • A ‘Help to Build’ scheme to underwrite loans to small builders to get them back on track and fast-track planning on small sites

However, the report has also been slated by a number of experts. Matt Hutchinson, director of the UK’s biggest flat share site, said: “Ed Miliband has missed a trick by sweeping great swathes of the electorate under the carpet – those people in private rented accommodation who are facing soaring rents, with little to no prospect of ever owning their own homes.

“The cold hard truth is we can no longer expect to be a nation of homeowners – the underlying structure of the property market has changed too much.

Miliband has promised that first time buyers will get priority. He also promises new ‘Housing Growth Areas”, which will give local authorities the power to assemble land and give certainty that building will take place. The question remains whether Labour can deliver on their promises. Ed Goodworth, real estate partner at consultancy BDO who has some concerns, said: “Plans to build 200,000 homes are all well and good, but how do the various political parties propose to do this? There are changes needed to the existing system to get Britain building in the first place, before Labour, or anyone else, can promise to set aside new homes for first-time buyers…Policymakers need to address the supply issue, in order to meet the UK’s housing demands.”

As the election creeps slowly closer, the main parties still have plenty to talk about on the more prevalent issues in UK politics, such as the NHS, immigration and housing. Labour has made the first move on housing, and it will be interesting to see the response from the Government parties. The report calls for power to be handed to local authorities alongside incentive schemes encouraging them to take up the offer. The Lyons Report is ambitious but will it generate support for Labour in the run up to the election? We shall see.

JBP analysis

Whilst there are some interesting points in the report such as giving greater powers to the Planning Inspectorate, under the surface it’s difficult to tell what impact this will have on the ground.
Local Authorities already have incentives to agree a Local Plan as it allows them to control speculative development and gives them a greater say over how their communities grow – and the Planning Inspectorate is already responsible for approving these. Similarly, the promise to ensure a proportion of planning gain is invested in schools, roads and other community infrastructure already happens in large schemes, as any local authority planning officer worth their salt will insist on Section 106 contributions targeted in these areas.

It would be interesting to see just how PINS would force Local Authorities who fail to put together a satisfactory Local Plan. Will they tell them to go back and re-write it just as they do now, or will they step in and write it for them? If the latter then this would be quite a radical move for Labour, and whilst popular with some would surely be looked on as a loss of local democracy.

The reports present some interesting ideas, but the devil is definitely in the detail.

JBP Staff Member

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