Labour leader attacks ‘stick-in-the-mud councils’ and accuses property developers of hoarding land to push up its value
Profiteering property developers that hoard land and councils that block developments will be swept aside in a “non-stop drive” to more than double the number of homes being built each year in England, Ed Miliband will promise on Monday.
Attacking “stick-in-the-mud councils”, the Labour leader will say he would order a national planning inspectorate to give priority to local authorities that want to expand if they are being blocked by neighbouring councils refusing to release land.
Under the Labour plans, councils would be empowered to compulsorily purchase land or charge fees if developers fail to build on land for which they have planning permission. Michael Lyons, the chair of Labour’s new independent commission on housing and a former BBC chairman, told the Guardian that Britain needed to recapture the postwar spirit when building homes was the national priority.
He said the country needed to be building more than 200,000 homes a year by 2020 if demand was to be met and the backlog of under-supply addressed.
Research by the property website Rightmove suggests house prices could rise by as much as 8% next year unless there is a flood of new properties on to the housing market.
Miliband will point out that the profits of the four biggest housing developers have soared by 557% this year. He will accuse them of hoarding land to push up its value, with homes being built at the slowest rate witnessed in peacetime for almost a century.
All three parties have promised that housing is a priority after decades in which demand has outstripped supply, but Miliband’s appointment of a high-profile commission including some of the most important names in UK housing is designed to show he wants to seize it as a Labour issue. Lyons is due to report by late summer and has been asked to prepare a strategy to raise the housebuilding rate to more than 200,000 homes a year by 2020.
Miliband is taking the political risk that the country is in the mood to give priority to housebuilding, both private and public, over the interests of those who lobby to halt expansion in their area.
He will say: “I want to send a clear message today: we will tackle those councils that block homes, those developers that hoard land and this government that fails to act on the worst housing shortages for a generation. We will stand up for homebuilders and first-time buyers.”
In his first specific proposal, Miliband promises that a Labour government would give councils that need to expand “a right to grow”, so giving them priority if an adjoining council is thwarting their efforts to build by refusing to release land.
At present neighbouring councils have a rarely enforced duty to co-operate in cases when a council has a home expansion plan that needs to include land overseen by a different authority.
Miliband proposes that in cases of dispute a national planning inspectorate would examine different local plans and arbitrate between authorities to allocate housing based on need, and then oversee a fast-track consultation to agree housing development.
He will say that four Labour-controlled councils – Stevenage, Oxford, Luton and York – have signed up to become the first “right to grow” local authorities, and that together they have plans to build 40,000 homes.
Miliband will visit Stevenage to highlight the near 20-year refusal of North Hertfordshire council to let the local council build 10,000 homes on the edge of town. “The plan has been blocked every step of the way by North Hertfordshire council, leading to consultations galore, planning permission granted and lengthy appeals,” he will say. “The only winners have been lawyers, on whom Stevenage has had to spend more than £500,000 since 2001 on this issue alone.”
Miliband will claim that home shortages and rising house prices mean many developers see more profit to be made from land speculation than from constructing homes.
He will commit the next Labour government to giving communities “use it or lose it” powers to release land that is sometimes being hoarded by developers even though it has planning permission or has been set aside to build on.
The proposals have already been denounced as Stalinist confiscation by some newspapers, but Lyons told the Guardian compulsory purchase of land and property had a long history in British local government, and had been used by parties of different stripes. Official figures show there are 523,700 units with planning permission that have not been completed. Estimates show the land held by developers could provide another 1.4m homes over 14 years of building work.
The profits of the biggest four developers by turnover – Barratt, Berkley, Persimmon and Taylor Wimpey – have risen by 557% since the coalition took office. The number of homes completed by these firms increased by just 4,067 in 2012, and the number of affordable homes built last year fell by 26%.
Miliband will say: “The government has focused almost solely on increasing demand for housing and, while tinkering with planning rules, has done next to nothing to increase supply. The result is a broken market where it now takes ordinary families over 20 years to save enough for a deposit and those renting privately are now paying half their income on rent.”
Lyons has also been asked to look at:
• How local authorities could identify sites for – and deliver a plan to build – new towns and garden cities like Stevenage, underwritten by Treasury guarantees modelled on those currently used for Help to Buy and infrastructure projects to provide cheaper funding.
• How to simplify rules surrounding the housing revenue account to give local authorities more flexibility in how existing public funding is spent.
• How to ensure communities get a greater share of windfall gains from the granting of planning permission and have more of a say in how they are used, including providing more social and affordable housing locally.