My Lords, I will speak to this group of amendments, doing so as a property professional. For very many years, the development process, housebuilding and the construction process have not been far from my daily life—at any rate until a few years ago, when I ceased to do that sort of thing on a day in, day out basis throughout the week.
I will start with the point raised by the noble Lord, Lord Lansley, in his superb explanation of the matter. I will throw some light on that, because, whether you have targets or whether you make an allocation at local level, none of these of themselves build a single unit of residential accommodation. There is a stage in between that is occupied by a commercial cohort of developers and housebuilders. I have worked for a few—although not recently—so I have no intrinsic bias against developers and housebuilders. They are, after all, the delivery system whereby the government targets will be met and, ultimately, one assumes, the affordability and availability of housing for those who need it and wish to occupy it will be delivered. However, they control the build-out rate—the more so if they control large strategic sites.
So far as I have a current interest, it is one that occupies an area within a local authority within which I reside and involves sites that are not many miles from where I live. To give one example, there is a site 6.5 miles from where I live, next to a major town, with consent for 2,700 homes. The consent was granted some years ago. Material commencement within the normal three-year period was made to construct the access. So far, the school—which I am told is fully occupied —and about two dozen houses have been built, but not much else. So, although it may fall short of what I might call the Letwin definition of land banking, it is an expandable pipeline of balance sheet assets that is not about delivery as such, but rather about managing profit and income streams.
It is very easy to make that material start and preserve your consent more or less in perpetuity. There has been some recent case law where that has wobbled a bit, but I will not go into that.
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The societal need to build out is effectively farmed out to the private developer sector. There seems no way in which this can be accelerated—we are stuck—and therefore, there is more pressure to create more allocations that then do not get built out. I asked CPRE for an update not long ago—I am not a member of CPRE, but it seems to have a very good handle on this—and it tells me that according to its calculations there are 1.1 million consented plots up and down the country
that are, as yet, unbuilt. At a 300 dwellings per annum buildout rate, we can do the maths as to how many years’ land supply that amounts to.
It gives one pause for thought, because this feeds into a high level of resistance. It has occurred locally to me and is something I should say my wife has been acutely involved with. A local neighbourhood plan, that had gone through all its stages and had got to the stage of being a made neighbourhood plan and was therefore a material part of the local plan, is in effect capable of being overridden because the local plan itself is out of date. Yet we have this candid demonstration of local desire and acceptance that more development is needed, and it is at risk of being overridden. Needless to say, the local likely lad developers who are already in the local village have stuck in a speculative application for another 1,500 homes, thank you very much.
I accept that the part of Sussex I live in has long been regarded as a development area. It is not that far from Gatwick Airport; it is quite close to the borough of Crawley, which has very important commercial infrastructure in terms of its industrial area and its manufacturing. It is not that far from the main motorway system. Crawley sits on the London to Brighton railway line. So there are good links and I understand that, but if we are to have a situation where the targets are somehow set according to a metric produced by central government without regard to capacity—and I am thinking particularly about infrastructure—then it is not very surprising if local people feel pretty hard done by, even as if their local neighbourhood plan, which was no doubt done on the back of a lot of people’s effort and with no small amount of public money involved, has been summarily trashed. That is not good enough.
I turn to the point made by the noble Lord, Lord Best. He has been a doughty campaigner for the housing needs of the elderly. I see that as being where the development process meets the infrastructure requirement—it is that interface—except the infrastructure required is a piece of social infrastructure rather than a piece of hard infrastructure like all the other stuff. However, it has been overlooked along with all the other things: roads, water, electricity, health, education, provision for age, transport—you name it, they have all been overlooked. Far too often, they are not in place sufficiently early on to avoid causing an overload.
In my part of west Sussex, we run into a particular problem referred to as water neutrality. It is not something that was created by dint of Ofwat or anybody like that—indeed, I think Ofwat and the water utility company would be happy to continue pumping for as long as there was stuff in the ground to do it. No, it was Natural England that said, “You’re depleting the water supply underneath an important wetland area and you’ve got to stop doing it”. That was the trigger that caused it. My fear about water neutrality is that we will end up with a fudge and it will become just another form of tariff that gets paid for, without anybody addressing the problem that the abstraction is too great. The rest of us, connected as we are to what you might call old-tech taps, baths, showers and that sort of thing, are not reducing our consumption. Indeed, we are using expensively treated water to water the garden or the lawn, or to wash the car or the dog. It is really not acceptable to have got to this stage. Who knows how
long it will take before some other pipeline, into another catchment area, can bring water in, or another reservoir is constructed, in order to enable all this to happen? Meanwhile, one supposes, the multiplier effect of housing need will build up until it reaches some sort of breaking point.
I think I have explained to your Lordships what I see as one of the fundamental problems of where we are. I do not have a ready-made solution, but I see people looking at bits of this process at local and community level, at government level, and in various utilities and strategic bodies, and I fail to see how they are knitting together and getting us to where we need to be. I do not have the answer to it, but I can see that there is a significant problem.
I turn now to something different, which was raised by the noble Baroness, Lady Fox of Buckley. I am acutely aware as a chartered surveyor that leasehold ownership has not been the flavour of the month for a very long time, but I would counsel caution. I am not an advocate for any particular form of tenure. I am an agnostic as far as that is concerned; if it works, let us have it. Leasehold is not specifically a feudal overhang based on medieval principles and, even worse, medieval practices between the participants. It is a means whereby someone has a form of ownership in part of a larger building, the fabric of which provides the common envelope for many similar units. One cannot get away from the fact that, philosophically, that is what it is. Whatever form of occupation rights one might devise, the essential friction between the ownership and occupation of a unit and the ownership and control of the block will always be apparent, especially if the owners, or one or two of the owners, of the units fall on difficult times and find themselves in difficulty about paying the ground rent, service charge or whatever it is and therefore come under pressure from managing agents—they are a breed, I have to say, I am not terrible in favour of; I once managed a block myself and never again. Thankfully, I am past the age where I need to be worried about that, but we fail to understand the friction between these various things. There are other forms of tenure, such as commonhold, but that does not necessarily get rid of the issue. Of itself, it may be fine, but if you introduce that, and the mortgage lenders and insurers put their ears back, there is then a lot of suspicion—a two-tier operation in the marketplace if you are not careful—and you end up damaging what you already have.
In my professional career, I have known leaseholder-owned blocks where a small cohort of those who sat on the committee that controlled the freehold and management ran the thing as their own personal fief and not, as far as I could see, in the best interests of the collective of all the people they were ruling the roost over. This is to do with attitudes. There is something anthropomorphic in why this is happening, which is one thing that does not go away whatever tenure you have; this exploitative approach by the few against the many, if I can put it that way, is not easily overridden. But if one wants to start looking at that, maybe there are things that can be done and duties that can be imposed on people that make it unproductive or actually dangerous to enter into these exploitative situations.
I pay tribute to the noble Baroness, Lady Fox of Buckley, because it is very valuable that she raises these points—but I suggest that we need to look beyond tenure alone and start to look at behaviour. That is the common thread between the developer middlemen and the leasehold management, which I would commend the Committee to look at as something outside the framework of some of what we have been discussing.