Free up more land for homes in buoyant cities - or choke off future economic growth

Date: 16/03/2010

A new Centre for Cities report has found not enough houses are being built where they are most needed - in the least affordable UK cities with the strongest economies.

The report recommends scrapping the national brownfield target, introducing new incentives for local authorities to build homes and devolving decisions about the green belt to councils.

The UK economy needs more homes built in cities like Brighton, London and Cambridge.  These cities have large graduate workforces and high employment rates.  They are the cities most likely to lead the recovery - and their economic growth is in danger of being stifled by unaffordable house prices. 

For example, Brighton has a high employment rate and large graduate population.  But an average house costs over eight times an average annual salary.  House building rates in Brighton are 55 percent below the England average. 

Local councils are not offering up enough land for housing:

• If the whole of England is a football pitch, all the built up land is the penalty area. Most of this is made up of gardens, roads, paths and railways. Housing would cover just a third of the centre circle.

• Only 1.1 percent of England is taken up by housing.  In recent years, the cost of land for development has rocketed and homes remain unaffordable.

If we don't build enough houses this risks choking off economic growth in our most dynamic cities, preventing the workforce from moving to where jobs can be found and where incomes are high, ultimately curbing national economic growth. 

The Government's house building targets and regional planning has had only limited success.  Councils in cities with strong economies need real rewards to bring forward land to build more houses where people want to live.  The Conservatives' recent council tax matching initiative is unlikely to provide a big enough incentive to combat antipathy towards new development

The report recommends:

• Abandoning the national brownfield target (currently 60 percent of all homes must be built on brownfield land).  The target's benefits no longer outweigh its costs.  Councils should be able to determine local priority land for development.
• Devolving responsibility for protecting the green belt to local authorities.  National protection should be reserved for places with outstanding environmental or social value only.
• Pilot land auctions in a small number of cities, allowing local authorities to keep a greater portion of the increased land value from granting planning permission - to reinvest in local communities.

Dermot Finch, Chief Executive of the Centre for Cities said:

"Over the past fifty years housing has become more and more unaffordable. During this time nowhere near enough homes have been built, particularly in our most dynamic cities like Cambridge and Reading. 

"The decade-long push to build on brownfield has run its course. Over the next decade, local authorities will need new incentives to build houses where they are needed.  This also means a fresh look at the green belt.  It's a myth that the entire green belt is a picture postcard rural idyll. A very small slice of it could be used for housing.

"We are not suggesting cities should concrete over their green belt, and we are not advocating car-dependent urban sprawl. But we do need to free up more land for new homes, especially in our most buoyant cities."

For more information, please contact:

Rosamund Taylor, 020 7803 4316/ 07876 175 426/r.taylor@centreforcities.org

Notes to editors:

Arrested Development: Are we building houses in the right places? is available to download from Tuesday 16th March.

In the table in the release, we have used data for Primary Urban Areas (PUA) - a measure of the ‘built-up' area of a city, rather than individual local authority districts, apart from Guildford where we have used the local authority area.

Centre for Cities is calling for land auction pilots in the Cities Manifesto, which includes our main urban policy ideas for the next Government.  Read more about this, including responses from Kate Barker and Gideon Amos at www.citiesmanifesto.org.

Further facts and stats

• In the long housing boom from 1995 to 2008, real house prices increased by 150 percent and real residential land prices by 260 percent.  Despite this, the supply of land for housing fell by 19 percent.
• The 65 local authorities with the least affordable housing are all in England's southern regions.  The 64 local authorities with the most affordable housing are all in the north and Midlands.
• Only 163,000 new homes were completed in the year to June 2009 - the slowest rate since the war.
• The UK is building fewer new houses per head than every other EU 15 country except Italy and 30 percent below the median rate for the EU 15.  France's building rate has exceeded the UK's since 1972.
• In an average year 8,000 hectares of undeveloped land in England is converted into new developments compared to 42,000 in Germany (5 times as much).
• Our new houses are the second smallest in the EU, 25 percent smaller than the EU average and 40 percent smaller than Germany or the Netherlands.
• Just 1.3 percent of the South East is covered by domestic buildings.  175,000 ha, or 1.6 percent of England's undeveloped land could provide homes, gardens and community infrastructure for 7 million people.
• 18 percent of green belt land is classified as ‘neglected' - this is roughly 290,000 ha.

Land Use in England

Source: Land Use Futures