It’s almost a year (June 16 2006) since I ventured into writing about Home Information Packs. Back then, the government, in the persona of Yvette Cooper, had just announced they were adding the Energy Performance Certificate to the pack as a way of complying with the European Energy Directive. About two weeks after this, they then ditched the requirement for a Home Condition Report, which until then had been the main feature of the pack.
The new slimline, energy saving HIPS were to have been introduced next week (June 1 2007) but the government has climbed down once more and postponed the launch till August 1 and even then has restricted the range of properties covered to those with four or more bedrooms. One of the reasons given is that there is an acute shortage of Energy Assessors: to date just 500 have been trained up.
It’s all become a bit of an embarrassment for the government. The idea of HIPs was first mooted back in the 1997 Labour manifesto but it wasn’t until the last election that the introduction of HIPs became part of the governments programme. Though most property people will happily admit that the English way of buying and selling houses is lengthy and chaotic, few can come up with any appealing alternatives. And they appear to have been almost universally united in their condemnation of HIPs. In fact, it’s been a legal challenge by the RICS (Royal Institute of Chartered Surveyors) which has caused the government’s latest turnaround.
The point, which is often overlooked, is that the market could have adopted HIPs, or something similar, without any prompting from government. A HIPped house would be advertised as Sale Ready, which would increase its attractiveness to buyers and just possibly its price, rather like words like organic or natural increase the attractiveness of items in supermarkets and the promise of a Full Service History makes a second hand car more marketable. It would suggest that a) the seller is serious and not just testing the waters and b) that there is a certain amount of confidence that the house is what it appears to be, and not a pile of shite waiting to be pulled apart by the buyer’s surveyor.
So why then have HIPs proved to be so unpopular? Why does nobody have a good word to say about them? My suspicion is that it’s to do with the vested interests of the property professionals to whom we entrust the buying and selling of our homes. And primarily, it must be the estate agents who fear HIPs the most. Estate agency is a classic foot-in-the-door business which survives on a mixture of confidence and blagging: they win business by promising huge sales prices achieved on tiny commissions and anything threatening this status quo threatens their livelihood. Thus HIPs have always seemed like very bad news for estate agents. For one thing, it has never been clear just how the pre-sale work was going to be paid for. An estate agent who asked for £500 up front before taking on your business would end up waiting an awful long time for a customer. On the other hand, if you offer to add the cost of the HIP survey work onto your commission, you run into all sorts of problems if the sale doesn’t go through. No, estate agents like things as they are, thank you very much, even if this does involve delinquent sellers, incompetent buyers and lots of broken chains.
But gnawing away at the back of my mind is that idea that there remains the nugget of a good idea in having Seller’s Packs prepared before a house goes on the market. Not necessarily for all houses, because there are many instances where people really do want to just test the market and don’t want to commit themselves to any expenditure in case the offers that come in aren’t what they want. But if you have to sell, for whatever reason, the availability of a Seller’s Pack would be like erecting an double-size For Sale sign outside your front door. It would create a two-tiered market of 1) houses for sale (maybe) and 2) houses really for sale.
What slightly amazes me is that the estate agency business is so up its own arse on this one that none of them has ever sought to offer Seller’s Packs as an extra marketing tool. If you sell something on e-bay, you get offered all kinds of add-on options, at a cost, to improve your visibility and your chances of getting a good price. Why not with houses? As someone who plans to be selling a house in the next twelve months, it’s a service I would happily pay for if I thought it would attract buyers. And I think it would.
Seems to me there is an opportunity here which everybody in the business is overlooking and the reason for this is that the government chose to force HIPs through using legislation, so that it would apply to every sale. By doing this, any hope of competitive advantage is wiped out and it just becomes another piece of useless red tape. But the estate agency businesses have been so knee-jerk in their opposition to HIPs that they have missed out on what could have been a really useful marketing tool.
In fact, the government’s chosen stance of making HIPs compulsory makes such an outcome unlikely. Only if HIPs were voluntary would there be any competitive advantage in using them. If one agent took up the challenge and it was shown to work well, then it wouldn’t take long for HIPs to spread throughout the sector and everybody and their aunt would be jumping up and down saying what a wonderful idea they were. But for that to have a chance of happening, Yvette Cooper and Ruth Kelly, the ministers responsible for this mess, have to have a change of heart. Or perhaps Gordon Brown is going to sack them anyhow.
27 May 2007
23 May 2007
Welcome to the World of Impact Assessments
I have been reading the government’s White Paper on Planning, published at the beginning of the week. Much of the interest in this document has focused, rightly, on the government’s intention to sub out difficult infrastructural works (i.e. new nukes, new runways) to an independent commission. Environmentalists have been jumping up and down saying this is going to make big planning decisions unaccountable, but I am not sure it will make that much difference because the government always gets its way in any event. What they are hoping to do is to make the process a little quicker.
I am more interested in the other end of the spectrum, how the government intends to streamline the processing of domestic planning applications. It looks like it needs some attention because the number of applications has mushroomed in recent years, due in no small part to the penal rates of stamp duty being charged for moving house, which causes everyone to start extending instead.
However the White Paper sandwich has an awful lot of bread and very little meat and, once you’ve dusted off the pages and pages of good intentions, what you are left with in terms of concrete proposals is not much more than guesswork.
Chapter 9 is where it gets written up and it all hinges on the future of Permitted Development Rights. This is a system that has existed since planning controls on domestic development were first introduced in 1948 and it allows certain minor works to be carried out without the need for planning permission. Each house comes with its own PD Rights but once these have been used up, any additional development requires planning permission.
The intention expressed in the White Paper is to replace the PD Rights system as it now exists with Impact Assessments. No or low impact development – and by impact we are talking principally about the effect on the neighbours — will be permitted, whilst high impact developments will require planning permission.
Reads well on the page but the problem that immediately sticks out about this proposal is that impact is subjective. Who is going to decide the difference between low and high impact? Hmm, it’s a difficult one.
But if you think about it for a couple of minutes and look at Labour’s past record on housing matters (think Home Information Packs here, not to mention its various competent person schemes aimed at streamlining the building regs), you can sort of figure out where this is all heading. Answer: Impact Assessors.
So I can see the future going something like this. If you want to make changes to your home you will have to first contact an Impact Assessor. They will determine whether you need to apply for planning permission. They will also levy from you an Impact Fee for environmental improvements to your neighbourhood — on the basis that a new bedroom is another school place or a hospital bed. And then you will be required to carry out additional eco-improvements to your home. By paying these fees and committing yourself to undertake the extra works, you will buy yourself a permit to develop. If you go ahead illegally, you risk fines (having been snitched up by nosey neighbours), not to mention difficulties selling your home when the time comes.
From the government’s point of view, this will streamline the planning process and vastly reduce the number of applications clogging up the system. Instead of having to hire expensive graduates to staff planning departments, school leavers will be able to train as Impact Assessors on a three-day intensive, get their competency badge and off they go, just like we are seeing with Domestic Energy Assessors at the moment. The assessments will be done by feeding measurements and checkbox answers into a laptop, which ordinary mortals won’t have a hope of understanding. And will therefore be unchallengable.
It all sounds horribly 1984 but the strange thing is it sort of makes sense and I am not sure it’s actually any worse than what happens already. In fact, it makes rather more sense than the current proposal to have Energy Performance Certificates every time a house is sold, as an impact assessment would be made prior to building work, which is the best time to make changes to the house. It could be a transformational tool for upgrading the existing housing stock, but it’s more likely to be construed as yet another stealth tax — which it is — and will therefore be hugely unpopular.
Maybe the government will be able to use its new independent planning commission to force this new measure through!
I am more interested in the other end of the spectrum, how the government intends to streamline the processing of domestic planning applications. It looks like it needs some attention because the number of applications has mushroomed in recent years, due in no small part to the penal rates of stamp duty being charged for moving house, which causes everyone to start extending instead.
However the White Paper sandwich has an awful lot of bread and very little meat and, once you’ve dusted off the pages and pages of good intentions, what you are left with in terms of concrete proposals is not much more than guesswork.
Chapter 9 is where it gets written up and it all hinges on the future of Permitted Development Rights. This is a system that has existed since planning controls on domestic development were first introduced in 1948 and it allows certain minor works to be carried out without the need for planning permission. Each house comes with its own PD Rights but once these have been used up, any additional development requires planning permission.
The intention expressed in the White Paper is to replace the PD Rights system as it now exists with Impact Assessments. No or low impact development – and by impact we are talking principally about the effect on the neighbours — will be permitted, whilst high impact developments will require planning permission.
Reads well on the page but the problem that immediately sticks out about this proposal is that impact is subjective. Who is going to decide the difference between low and high impact? Hmm, it’s a difficult one.
But if you think about it for a couple of minutes and look at Labour’s past record on housing matters (think Home Information Packs here, not to mention its various competent person schemes aimed at streamlining the building regs), you can sort of figure out where this is all heading. Answer: Impact Assessors.
So I can see the future going something like this. If you want to make changes to your home you will have to first contact an Impact Assessor. They will determine whether you need to apply for planning permission. They will also levy from you an Impact Fee for environmental improvements to your neighbourhood — on the basis that a new bedroom is another school place or a hospital bed. And then you will be required to carry out additional eco-improvements to your home. By paying these fees and committing yourself to undertake the extra works, you will buy yourself a permit to develop. If you go ahead illegally, you risk fines (having been snitched up by nosey neighbours), not to mention difficulties selling your home when the time comes.
From the government’s point of view, this will streamline the planning process and vastly reduce the number of applications clogging up the system. Instead of having to hire expensive graduates to staff planning departments, school leavers will be able to train as Impact Assessors on a three-day intensive, get their competency badge and off they go, just like we are seeing with Domestic Energy Assessors at the moment. The assessments will be done by feeding measurements and checkbox answers into a laptop, which ordinary mortals won’t have a hope of understanding. And will therefore be unchallengable.
It all sounds horribly 1984 but the strange thing is it sort of makes sense and I am not sure it’s actually any worse than what happens already. In fact, it makes rather more sense than the current proposal to have Energy Performance Certificates every time a house is sold, as an impact assessment would be made prior to building work, which is the best time to make changes to the house. It could be a transformational tool for upgrading the existing housing stock, but it’s more likely to be construed as yet another stealth tax — which it is — and will therefore be hugely unpopular.
Maybe the government will be able to use its new independent planning commission to force this new measure through!
21 May 2007
All Planned Out?: afterthoughts
I struggle with planning policy. I know it’s important. I can often see the absurdities inherent in the system. I think it could be reformed. But what to do exactly? That’s where I struggle.
Up until recently, I was an avowed supporter of the tear-it-all-up school of anarchist planning. There was, I figured, no shortage of land, we weren’t about to concrete over the entire countryside and the world would be a much fairer and better place if people were allowed to do what they wanted on their own land. In fact, I devised a system whereby someone wanting to bring forward a new development would have to pay compensation directly to the neighbours, instead of having to apply for planning permission. I thought that, by so doing, I had unlocked the NIMBY problem.
Maybe I had, but then all this Urban Taskforce stuff came out about the importance of density, and unlocking the formula for successful walking towns. You have to cram lots of things into a small area to make them tick, without having to drive endless miles to samey shopping malls a l’Americana. Yeah, it made sense, but it was all at odds with being able to build just anywhere you wanted to. On the other hand, not everyone wants to live in a 21st century Italian hill town. Some people like gardens and cars and space. Why should densely packed new towns be the only form of development?
Next, the whole carbon debate loomed. In its purest sense, it suggests that we abandon new development altogether and just concentrate on improving what already exists. However green you manage to make it, new development places strain and stress on the existing environment, be it roads, trains, schools, water or just carbon emissions. If we are to sort out our little problem with carbon emissions, it’s hard to see how we can do it when the economy is still expanding.
And then there is another nasty, intractable little issue to do with building new homes in a country where jobs are plentiful. Just as new roads tend to fill up with traffic, so new homes fill up with people. And in a country with very porous borders, these people will pour in from all over the world. So you are not really addressing the problem which new housebuilding is meant to address, which is to make housing generally more affordable by making more of it. As the Irish example has shown, even a huge housebuilding boom doesn’t necessarily make houses any cheaper. In which case, why bother to build new homes at all?
Ah, we are told, we have more households now due to us a) living longer and b) living separately or at least in smaller and smaller groupings. Therefore we must build more to meet these needs. But are they really needs? Or are they just another consumer want? Sure, we all aspire to having our own home but maybe that’s becoming an anti-social aspiration, just like everyone owning their own car (or two). Maybe we have to learn to share more, just like we have to learn to catch the bus sometimes.
And bear in mind another problem with new housebuilding. New housing is an incredibly inefficient way of housing people. How come? Because we live in a service-led economy, every new home dweller brings with them the demands for a huge amount of services, be they schooling, shopping, health care, repairs, you name it. So for every ten new homes you build, you create about eight new jobs just servicing the people living in these new homes. Thus if you build a new town of 10,000 homes, you instantly create 8,000 new service jobs, and you’ve immediately filled three quarters of the new homes without expanding the supply of housing. This wouldn’t matter if the population as a whole was static, but it’s not, it’s very elastic. So the one problem which new housebuilding is meant to address — i.e. a shortage of housing — it does so in a most cumbersome manner. It’s little wonder that houses don’t get any cheaper when you build more of them.
Most of this stuff got an airing at the All Planned Out? conference last week. Did it come to any conclusions? Of course it didn’t. Planning debates never do. Audacity, the event organisers, want lots of new homes everywhere. Others wanted more factory-built homes. Some want density of Tuscan proportions. Some want a return to suburbia. Or even exurbia, a phrase I hadn’t heard before, and am still struggling to comprehend. Some wanted more rural development, maybe a re-awakening of the 1930s plotlands movement. Simon Fairlie put in a compelling plea for sustainable rural homes in order to revitalise the countryside. Even the stuffy tweed jackets of the CPRE don’t oppose new building – they just want it all crammed into urban extensions on brownfield sites.
But the one thing everybody wanted was new homes of some sort or another. Nobody questioned the logic of development per se. But then if you put a bunch of housebuilding professionals together in a building called the Building Centre, what do you expect?
As I said, I find all this planning policy stuff deeply confusing…
Up until recently, I was an avowed supporter of the tear-it-all-up school of anarchist planning. There was, I figured, no shortage of land, we weren’t about to concrete over the entire countryside and the world would be a much fairer and better place if people were allowed to do what they wanted on their own land. In fact, I devised a system whereby someone wanting to bring forward a new development would have to pay compensation directly to the neighbours, instead of having to apply for planning permission. I thought that, by so doing, I had unlocked the NIMBY problem.
Maybe I had, but then all this Urban Taskforce stuff came out about the importance of density, and unlocking the formula for successful walking towns. You have to cram lots of things into a small area to make them tick, without having to drive endless miles to samey shopping malls a l’Americana. Yeah, it made sense, but it was all at odds with being able to build just anywhere you wanted to. On the other hand, not everyone wants to live in a 21st century Italian hill town. Some people like gardens and cars and space. Why should densely packed new towns be the only form of development?
Next, the whole carbon debate loomed. In its purest sense, it suggests that we abandon new development altogether and just concentrate on improving what already exists. However green you manage to make it, new development places strain and stress on the existing environment, be it roads, trains, schools, water or just carbon emissions. If we are to sort out our little problem with carbon emissions, it’s hard to see how we can do it when the economy is still expanding.
And then there is another nasty, intractable little issue to do with building new homes in a country where jobs are plentiful. Just as new roads tend to fill up with traffic, so new homes fill up with people. And in a country with very porous borders, these people will pour in from all over the world. So you are not really addressing the problem which new housebuilding is meant to address, which is to make housing generally more affordable by making more of it. As the Irish example has shown, even a huge housebuilding boom doesn’t necessarily make houses any cheaper. In which case, why bother to build new homes at all?
Ah, we are told, we have more households now due to us a) living longer and b) living separately or at least in smaller and smaller groupings. Therefore we must build more to meet these needs. But are they really needs? Or are they just another consumer want? Sure, we all aspire to having our own home but maybe that’s becoming an anti-social aspiration, just like everyone owning their own car (or two). Maybe we have to learn to share more, just like we have to learn to catch the bus sometimes.
And bear in mind another problem with new housebuilding. New housing is an incredibly inefficient way of housing people. How come? Because we live in a service-led economy, every new home dweller brings with them the demands for a huge amount of services, be they schooling, shopping, health care, repairs, you name it. So for every ten new homes you build, you create about eight new jobs just servicing the people living in these new homes. Thus if you build a new town of 10,000 homes, you instantly create 8,000 new service jobs, and you’ve immediately filled three quarters of the new homes without expanding the supply of housing. This wouldn’t matter if the population as a whole was static, but it’s not, it’s very elastic. So the one problem which new housebuilding is meant to address — i.e. a shortage of housing — it does so in a most cumbersome manner. It’s little wonder that houses don’t get any cheaper when you build more of them.
Most of this stuff got an airing at the All Planned Out? conference last week. Did it come to any conclusions? Of course it didn’t. Planning debates never do. Audacity, the event organisers, want lots of new homes everywhere. Others wanted more factory-built homes. Some want density of Tuscan proportions. Some want a return to suburbia. Or even exurbia, a phrase I hadn’t heard before, and am still struggling to comprehend. Some wanted more rural development, maybe a re-awakening of the 1930s plotlands movement. Simon Fairlie put in a compelling plea for sustainable rural homes in order to revitalise the countryside. Even the stuffy tweed jackets of the CPRE don’t oppose new building – they just want it all crammed into urban extensions on brownfield sites.
But the one thing everybody wanted was new homes of some sort or another. Nobody questioned the logic of development per se. But then if you put a bunch of housebuilding professionals together in a building called the Building Centre, what do you expect?
As I said, I find all this planning policy stuff deeply confusing…
17 May 2007
Who Owns What: Update
The news that Hanson is to be taken out by Heidelberg Cement in an £8billion deal brings to a close the British ownership of its building materials sector. Whilst the City scribes have been using the takeover as an excuse to rerun the colourful history of Hanson Trust, they have largely ignored the fact that a whole sector of our industry has disappeared from our stock market in less than ten years.
Simultaneously, the much smaller Baggeridge Brick is being taken over by the Austrian brick giant Weinerberger in an acquisition worth just £87million.
The rout is all but complete. What’s left? It looks to me that there are now only two medium sized companies quoted in London that are active in this area. They are:
• Ennstone, the aggregates and readymix business, worth £180million
• Marshalls, the paving and landscaping people, worth £500million
Here follows a list of what went where.
RMC: readymix concrete and cement. Now owned by Cemex of Mexico. Also own Russell roof tiles and Rugby Cement and Thermabate
Blue Circle: Britain’s original cement company, an original constituent of the FT30 in 1953, taken over by Lafarge (large French conglomerate) in 2001
ARC: part of Hanson, which includes Hanson Brick (the old London Brick Company, makers of the LBC) and Thermalite and the old Marshall’s Floors business. Now Hanson is about to be taken over, see above.
Castle Cement: now part of Heidelberg Cement, quoted in Germany
Bradstone: a brand owned by Aggregate Industries, a UK asphalt and concrete conglomerate which was itself taken over by Holcim of Switzerland in March 2005 for £1.8bn
Tarmac: now the Industrial Minerals Division of Anglo American plc, which includes Tarmac Topfloor and Durox
Ibstock Brick: taken over by CRH, large Irish conglomerate, in 1999
Celcon: Owned by H+H International A/S, a Danish company.
Baggeridge Brick: about to be taken over by Weinerberger of Austria
Redland: taken over by Lafarge
BPB: once British Gypsum, bought by St.Gobain in 2005. As well as plasters and plasterboard, it owns Artex and Rawlplug
Marley: now owned by Etex Group of Belgium
Boulton & Paul Joinery: originally bought by Rugby cement, sold to privately owned US joinery business Jeld Wen in 1999
John Carr: another independent joinery producer, also owned by first Rugby and merged with Boulton & Paul, now subsumed into Jeld Wen
Magnet Joinery: once quoted, now owned by the Swedish kitchen company, Nobia
Premdor Crosby: owned by Masonite of Canada, quoted in Toronto
Anglian Windows: based in Norwich, went public in 1992, MBO in 2001
Velux: private Danish company
Osma: always owned by Dutch group Wavin. Wavin is short for WAter and VINyl! Used to be part owned by Shell but I now jointly owned by Overijssel Water Board (who started it in the 1950s) and CVC Capital Partners, private equity.
Terrain: sold by Caradon to Geberit. Swiss plumbing supplies company, in 1999
Hepworth: bought out by Vaillant, sold on to Wavin
Baxi Potterton: now part of a plc owned by private equity, includes Heatrae Sadia, makers of Megaflo
Aqualisa: part of Baxi group
Myson Radiators: owned by Rettig, a privately owned Finnish company
Pilkington: leading glass manufacturers, bought by Nippon Glass in 2006
Ideal Stelrad: based in Hull, once part of Caradon, sold to HSBC private equity in 2002
MK Electric: part of Caradon group, which seems to have disappeared
Celotex: private UK company, MBO from larger American business using the same name
Kingspan: Irish public company
Jablite: brand name of Vencil Resil, taken over by Synbra Group BV from Holland
Rockwool: Danish public company
Sadolin and Sikkens: part of European conglomerate Akzo Nobel which includes what was left of Courtaulds and Crown Berger paints
Dulux: still part of ICI, as are Cuprinol and Hammerite
Jewson: UK’s largest builder’s merchant, owned by St Gobain
Travis Perkins: Britain’s No 2 builder’s merchant, independent, bought Wickes in 2005
,
Simultaneously, the much smaller Baggeridge Brick is being taken over by the Austrian brick giant Weinerberger in an acquisition worth just £87million.
The rout is all but complete. What’s left? It looks to me that there are now only two medium sized companies quoted in London that are active in this area. They are:
• Ennstone, the aggregates and readymix business, worth £180million
• Marshalls, the paving and landscaping people, worth £500million
Here follows a list of what went where.
RMC: readymix concrete and cement. Now owned by Cemex of Mexico. Also own Russell roof tiles and Rugby Cement and Thermabate
Blue Circle: Britain’s original cement company, an original constituent of the FT30 in 1953, taken over by Lafarge (large French conglomerate) in 2001
ARC: part of Hanson, which includes Hanson Brick (the old London Brick Company, makers of the LBC) and Thermalite and the old Marshall’s Floors business. Now Hanson is about to be taken over, see above.
Castle Cement: now part of Heidelberg Cement, quoted in Germany
Bradstone: a brand owned by Aggregate Industries, a UK asphalt and concrete conglomerate which was itself taken over by Holcim of Switzerland in March 2005 for £1.8bn
Tarmac: now the Industrial Minerals Division of Anglo American plc, which includes Tarmac Topfloor and Durox
Ibstock Brick: taken over by CRH, large Irish conglomerate, in 1999
Celcon: Owned by H+H International A/S, a Danish company.
Baggeridge Brick: about to be taken over by Weinerberger of Austria
Redland: taken over by Lafarge
BPB: once British Gypsum, bought by St.Gobain in 2005. As well as plasters and plasterboard, it owns Artex and Rawlplug
Marley: now owned by Etex Group of Belgium
Boulton & Paul Joinery: originally bought by Rugby cement, sold to privately owned US joinery business Jeld Wen in 1999
John Carr: another independent joinery producer, also owned by first Rugby and merged with Boulton & Paul, now subsumed into Jeld Wen
Magnet Joinery: once quoted, now owned by the Swedish kitchen company, Nobia
Premdor Crosby: owned by Masonite of Canada, quoted in Toronto
Anglian Windows: based in Norwich, went public in 1992, MBO in 2001
Velux: private Danish company
Osma: always owned by Dutch group Wavin. Wavin is short for WAter and VINyl! Used to be part owned by Shell but I now jointly owned by Overijssel Water Board (who started it in the 1950s) and CVC Capital Partners, private equity.
Terrain: sold by Caradon to Geberit. Swiss plumbing supplies company, in 1999
Hepworth: bought out by Vaillant, sold on to Wavin
Baxi Potterton: now part of a plc owned by private equity, includes Heatrae Sadia, makers of Megaflo
Aqualisa: part of Baxi group
Myson Radiators: owned by Rettig, a privately owned Finnish company
Pilkington: leading glass manufacturers, bought by Nippon Glass in 2006
Ideal Stelrad: based in Hull, once part of Caradon, sold to HSBC private equity in 2002
MK Electric: part of Caradon group, which seems to have disappeared
Celotex: private UK company, MBO from larger American business using the same name
Kingspan: Irish public company
Jablite: brand name of Vencil Resil, taken over by Synbra Group BV from Holland
Rockwool: Danish public company
Sadolin and Sikkens: part of European conglomerate Akzo Nobel which includes what was left of Courtaulds and Crown Berger paints
Dulux: still part of ICI, as are Cuprinol and Hammerite
Jewson: UK’s largest builder’s merchant, owned by St Gobain
Travis Perkins: Britain’s No 2 builder’s merchant, independent, bought Wickes in 2005
,
14 May 2007
All Planned Out and the Irish Conundrum
On this coming Saturday, May 19th, I am set to appear at a Conference called All Planned Out, to be held in London’s Building Centre. It’s been organised principally by Ian Abley of Audacity and it’s set to explore the tangled web woven between the housebuilders and the planners. It’s a hot topic this week, as Gordon Brown has just gone on record as saying he wants to make housing affordability a key plank of his administration’s policies. Good luck, Gordon.Audacity’s line on all this is that we can build our way out of this problem. House prices too high? Let’s bung up 500,000 a year for ten years. Sorted. Brown seems to agree but, being a politician, presents a very watered-down version with just five new Eco Towns instead.
But the Irish experience suggests that a mass housebuilding programme may not deliver the goal of affordable house prices. When I first became aware of the Irish housebuilding boom, six or seven years ago, I was just amazed to find out that they were building 50,000 new homes a year in the Republic. On a per-head-of-population basis, this was approaching five times the rate the UK was achieving at the time.
Did this ease the upward pressure on house prices in Ireland? Did it heck. Since then, they have trebled.
Last year, there were apparently 90,000 housing starts in Ireland, just an incredible number in a country with a recorded population of no more than 4.2 million (though it may well, in reality, be much higher than this now). At long last, supply appears to be outstripping demand and lots of these new homes are currently unoccupied, bought as investments or as holiday lets, whilst lots more are rented out to East European construction workers, employed building yet more homes. And still Irish house prices keep going up. It looks like a classic bubble, a speculator’s binge fest, but people have been saying that for years and the bubble just refuses to burst.
Does the Irish example have any relevance to the UK? Our equivalent total to Ireland’s 90,000 new housing starts in 2006 would be no less than 1,200,000, roughly seven times more than we actually achieved. It makes even Audacity’s rallying cry of 500,000 a year look puny in comparison. You would need a microscope to even see Gordon Brown’s five Eco Cities. And yet, even this enormous house building boom hasn’t delivered affordable housing to the young of Ireland. What’s going on there? Maybe, we’ll be able to find out this Saturday. In the meantime, mug up via an article on Wikipedia entitled the Irish Property Bubble.
The Planning Gain Officer
Just back from Glasgow where I helped deliver the seminars at this year’s Homebuilding & Renovating Scottish show. Very well attended and a very lively audience.
I learned quite a bit, as ever, and in particular I found out about a new breed of planner, the Planning Gain Officer. In the past few years, it has become customary for local councils to start “requesting” payments from selfbuilders and small developers by way of contribution to the community. It’s been happening on big sites for decades and apparently the Americans are past masters at this sort of thing as well. But it’s still relatively new on small development sites and as yet it’s been piecemeal. Some councils don’t bother, others charge a little and a few charge a lot, like £20k or so.
I’d not heard of it being applied in Scotland before, but that’s all changed now. Back in 2005, Aberdeen City Council hit on the wheeze of appointing a Planning Gain Officer to fill a much needed gap for this Council, consistent with efficient government principles. You bet. The job description basically involves dreaming up reasons to extort money from private developers and selfbuilders. Initially, the council didn’t expect the income to cover the outlay on funding the post — which might seem just a little inconsistent with the principles of efficient government — but they needn’t have worried. It was set to become a goldmine for the local authority and the guy is now in demand right across Scotland, lecturing all the other authorities about how to go about it.
By way of example, I came across one guy in his sixties who was applying to convert his workshop into a house. In order to do this, his council were demanding £3,000 to go towards the local primary school, £2,000 for the secondary school and £1,700 for work on a new railway. Coupled with a bizarre demand by his building inspector to install a sprinkler system in his two storey, two bedroomed house, he reckoned he would be out of pocket by £15,000 or more, just to get his project off the ground.
I learned quite a bit, as ever, and in particular I found out about a new breed of planner, the Planning Gain Officer. In the past few years, it has become customary for local councils to start “requesting” payments from selfbuilders and small developers by way of contribution to the community. It’s been happening on big sites for decades and apparently the Americans are past masters at this sort of thing as well. But it’s still relatively new on small development sites and as yet it’s been piecemeal. Some councils don’t bother, others charge a little and a few charge a lot, like £20k or so.
I’d not heard of it being applied in Scotland before, but that’s all changed now. Back in 2005, Aberdeen City Council hit on the wheeze of appointing a Planning Gain Officer to fill a much needed gap for this Council, consistent with efficient government principles. You bet. The job description basically involves dreaming up reasons to extort money from private developers and selfbuilders. Initially, the council didn’t expect the income to cover the outlay on funding the post — which might seem just a little inconsistent with the principles of efficient government — but they needn’t have worried. It was set to become a goldmine for the local authority and the guy is now in demand right across Scotland, lecturing all the other authorities about how to go about it.
By way of example, I came across one guy in his sixties who was applying to convert his workshop into a house. In order to do this, his council were demanding £3,000 to go towards the local primary school, £2,000 for the secondary school and £1,700 for work on a new railway. Coupled with a bizarre demand by his building inspector to install a sprinkler system in his two storey, two bedroomed house, he reckoned he would be out of pocket by £15,000 or more, just to get his project off the ground.
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