Nick Boles on Delivering Homes and the Right to Build

selfbuildhomes10:30 Thursday 3rd July 2014
BBC Radio Cambridgeshire

[A]NDIE HARPER: People who want to build their own home will be able to turn to their council to make their dream a reality. This is the idea under measures announced by Nick Boles today. The Planning Minister said he would give aspiring self- and custom-builders a new right to build. In Europe it’s the thing to do, but will it work in Cambridgeshire, with the cost of land at such a premium? Is this something for the elite rather than the masses? Well I’m delighted to say that Nick Boles joins me now. Good morning to you.
NICK BOLES: Good morning.
ANDIE HARPER: So what is the thought behind this? I know that it’s much more common on the Continent. Is that what we’re trying to emulate?

NICK BOLES: Well yes. What we’ve got in our country is we have a very very concentrated house building industry. So you’ve got these very very big companies that supply the overwhelming majority of the houses that we buy. And they don’t build enough, bluntly. And if you look at Germany or France or the Netherlands or Italy, or also Australia and the United States, between forty and sixty per cent of all the new houses built every year, and they build many more than we do, are built by people who basically just buy a plot of land and then hire a local builder and maybe a local architect to build them a house. And it’s a completely different way of doing things. And the problem here has been that it’s been very hard for people who want to do that to get hold of a plot of land, and so that’s what this policy is designed to fix.
ANDIE HARPER: And on the Continent are these plots of land on large tracts, where people go up and stake their claim on a plot, and there are a lot of people doing the same thing? Or are they on individual bits and pieces of land, they squeeze a property in and there’s a property there?
NICK BOLES: It’s a whole variety, and I think it should be a whole variety here. So you might .. I know that in Cambridge there are some big areas of major development on the edge of the city. And you might within those big areas have a certain area or a number of areas that were given over to custom-builders, where the developer, instead of putting up a house would just put in the services, maybe put down a concrete slab, and then sell the site on. But equally, in villages, you then might be, you know, that paddock, or that little corner, which everybody was happy to see a couple of houses go up on, and perhaps would be happier to see it if they knew that it was local people doing it, people who were going to actually live there for a long time to come.
ANDIE HARPER: You mentioned Cambridgeshire, and that obviously is the county that we are concentrating on. And I would suggest to you that land is at such a premium here that it would be almost impossible, whereas there are other parts of the country where getting your hands on a plot of land at a reasonable price and with availability would be much easier.
NICK BOLES: I do understand and of course you’re right that the land prices are very high in some parts of the country, and Cambridgeshire is one of those parts. But remember, even if you buy a house from Barratts or Bovis or Crest Nicholson, or whoever it is in Cambridgeshire, you’re also paying for the land value, and that’s included. That’s why houses are expensive, even when they’re not very big. So it’s not really more expensive than buying a house from one of the big builders. And in fact the record is that it’s about twenty to twenty five per cent cheaper for a very simple reason, which is that you’re not paying effectively the profit margin that the big housebuilder makes on building you the house. And you’re not actually .. they spend a lot .. these big housebuilders are spending a lot of money on marketing, on trying to persuade people to buy their houses. Well of course you’re not spending money on marketing to yourself, because you’ve just bought a plot of land. So you’ve said in your introduction, is this something just for the elite? That is the key thing to break. In the rest of Europe and indeed in America and Australia, this is something that very very ordinary people on ordinary incomes do, and they do it because you get something that you get to design, you get control over, and it’s cheaper. And that’s the key thing. And it’s not cheaper because the land is cheaper. You pay the same price for the land as you would if you bought a house from one of the big boys. But what’s cheaper is you’re not paying all of their other costs.
ANDIE HARPER: But the big boys can outbid people, can’t they?
NICK BOLES: Well that’s what this policy is designed to do. So basically the way it would work is that every local authority, and in this first instance we’re asking a few local authorities to come forward as vanguards to try this out, but what they do is they publish a list and invite local people who’ve got a local connection to say if they would like to have a site to build a house. And then they would have a responsibility to go and find sites, and prepare them, and then sell them on. They wouldn’t need to subsidise this. They could make all of their money back. But those sites would then only be available to self-builders, custom-builders as they’re called. So therefore the big boys wouldn’t be able to snaffle all of the sites, because the local authorities would be finding different sites, and additional sites, over and above what the big housebuilders have. And that way we can ensure that actually these custom-builders can actually get access to land, which as you rightly say, is currently the thing that’s making it so difficult.
ANDIE HARPER: You mentioned local authorities. Are local councils behind you? Because as you might expect, we called all of our local authorities in Cambridgeshire, and they didn’t seem to know much about it.
NICK BOLES: Well they’ve only just received the invitation. The Chancellor made an announcement in the Budget, but as ever with these things it was buried on page four hundred and seventy three. We’ve just sent out a formal invitation to councils to come forward. To be honest I wasn’t totally sure that many councils were going to understand this, or they’re thinking gosh, this sounds like a lot of work, and are we going to have to put a lot of money at risk and the like. But actually just last week I went and talked to a whole bunch of leaders of local authorities. And you’re right. They hadn’t heard about it. But when I explained it to them, they were all incredibly excited about it, which I was slightly surprised by to be honest. I think the reason why is what they understood was that this is a way of meeting housing needs for local people, in a way that other local people would be more likely to support. Because I think that if one of the big house builders comes forward with a planning application to build houses on a field on the edge of your village, you’re quite likely to oppose it. If on the other hand it’s people who are from the area, they’re going to build their own house, it’s going to be done by a local builder, employs local people, I think it’s rather more likely that you’ll actually get people to accept that. And I think that’s what these council leaders understood.
ANDIE HARPER: Well we contacted as I said all of our councils, and Cambridgeshire County Council got back to us. And they hinted that it might not be practicable, because they told us, and I quote, “many of our sites are aimed at larger scale development rather than individual piecemeal building. That way it can be planned in a cohesive way and designed to have the right services, transport health and education provision, as well as affordable homes, while bringing in a greater return for the local taxpayer.” So that would appear for them saying really, you know, this isn’t going to work.
NICK BOLES: Well unfortunately they just haven’t understood it, and obviously my job, one of the reasons I’m doing this interview with you, is to try and explain it to them. It’s completely the reverse of the case, and the reason why as I say every single European country, all of which build more houses than we do, and more cheaply, they all rely on this, is because it’s actually a good way of doing it. You can sometimes do it on big sites. What often happens in Germany is that the local authority will buy a big plot of land, they’ll put in the roads, they’ll put in and work out where schools are going to go, where the doctor’s surgery is going to go. And then they will divide that up into plots, quite small plots, so not a plot for a hundred houses, a plot for one or two, and then sell them on to people from the locality who want to either put up a small block of flats, if it’s a town, or if it’s more a rural area, then houses. And it’s actually that approach that enables them to plan the infrastructure in a much better way. There’s absolutely no reason why you couldn’t include elements of this on all of the big sites at Northstowe, and elsewhere, in the county that the local authorities are bringing forward.
ANDIE HARPER: Nick Boles, it’s been really good to talk to you. Thank you very much for joining us.
NICK BOLES: Likewise. Thank you for the opportunity.
ANDIE HARPER: Cheers. That’s Nick Boles who is the Planning Minister.