This Blessed Plot

landscape07:25 Monday 24th June 2013
Bigger Breakfast Show
BBC Radio Cambridgeshire

PAUL STAINTON: For decades, when it comes to housing, politicians have only provided short-term fixes, according to our country’s chartered surveyors. They say the UK is at risk of creating another house price problem, (and) that the Government should be aiming to build twice the number of houses than it’s currently aiming for. But is that going to happen? Sean Farrington is from our business unit. Morning Sean.
SEAN FARRINGTON: Morning Paul.
PAUL STAINTON: We’d all like more houses built, I think. Every council in Cambridgeshire would like to build more houses, but there ain’t the money around.
SEAN FARRINGTON: Well you say we’d all like more houses, but of course if there was all of a sudden a plethora of new houses all across the country, that would mean house prices probably wouldn’t go up as quickly as they might already. And it’s a question that everybody really has to answer themselves. Do you want to see house prices going up? If you own one, do you like the idea of it, but if that means your child can’t afford one, or you’re in the market for one, you don’t really want to see them going up any more. And actually what the chartered surveyors say is that Government policy over decades now has been based around people owning homes. That has helped push prices up. And that is not a healthy way to have a housing market strategy.
PAUL STAINTON: The Government’s announced several housing schemes, part-buy, part-this, part-that. They’re sort of working, aren’t they, in the short term?
SEAN FARRINGTON: If your aim is to get the housing market going, and getting people buying, and that sort of helps the economy, because somebody buys a new home and not only does it boost confidence .. I spoke to one lady who’d got on .. with this help to buy scheme she’s bought a house. Her and her partner had been trying for years and hadn’t been able to save up that deposit. And you could just hear the confidence in her voice. They’d finally got the house that they want. Whether they can afford that house in the long term is a very different question. but they boost confidence, these schemes do, and they get people buying. But is that the .. without then the increased supply from new home builders, if we don’t build enough homes, it will just .. all it will do is build up demand. And there’s been a lot of criticism that actually if this scheme .. these schemes go on for too long, they may actually push house prices up so much that we get in another bubble, and just make it more unaffordable for people.
PAUL STAINTON: And actually, those people in those houses only own a little bit of it, and might only own a little bit of it for ever. (LAUGHS)
SEAN FARRINGTON: Exactly. If you haven’t got a large repayment mortgage on that, and you’re not paying it down considerably, then yes, that’s exactly the situation. And you have to remember, we’re in (an) all-time low for interest rates. If all of a sudden .. you know it was only six, seven years ago that we were looking at interest rates of three, four per cent. And it’s not that long in living memory that interest rates were ten, eleven, twelve per cent. Now it doesn’t look like we’re heading that way any time soon, but these mortgages are twenty five, thirty years long, and can people afford big moves in interest rates? Are people taking that into account? There’s lots of questions you need to be asking, and what this report from the chartered surveyors says, they want to actually see more policy from the Government that looks at rentals, that looks at affordable housing, not just based around the big ones, based around buying a home. We need to be thinking, actually, a lot of us maybe will never own a home in our lives. We need to be thinking, is the rental market strong enough and good enough for us to do that.
PAUL STAINTON: Yes. It works for people in France. A lot of people rent houses in France. Sean, thank you very much. Ed Miliband of course was in Birmingham at the weekend, calling for a crackdown, this is his view, on developers who sit on land earmarked for development. Cambridge Labour Parliamentary candidate Daniel Zeichner joins us this morning. Daniel, morning.
DANIEL ZEICHNER: Morning Paul.
PAUL STAINTON: So he wants a crackdown on land bankers, effectively, to unlock this land and get building.
DANIEL ZEICHNER: Exactly. many of the points your previous speaker made I totally agree with. The problem we’ve got is we’ve got 400,000 permissions to build homes across the country, but the actual number of houses being built is the lowest since the 1920s. And that’s partly why prices are so high, of course. Since the housebuilders, there’s absolutely no good for young people looking for a home in Cambridgeshire.
PAUL STAINTON: Well cracking down on people that own land is not necessarily going to get houses built, is it?
DANIEL ZEICHNER: Well it’s a complicated mix of issues, it’s true. This has been a debate that’s run for many years. But there’s long been a suspicion that the housebuilders, they’re business people, they’re trying to maximise their profit, they hold onto land to develop it at what is the right time for them. But we think it’s got to be about the right time for people who need those homes.
PAUL STAINTON: The Royal Institution of Chartered Surveyors said that Conservative and Labour have both failed to get Britain building. This has just got be part of it though, hasn’t it, to get people to unlock land. Then how do you unlock finance?
DANIEL ZEICHNER: It’s both of those things. I would say that actually, by about 2005, 2006, we were building many many more homes. We then had the financial crash, and we’ve been recovering from that since. So this is all part of Ed Miliband’s attempt to get an understanding that Labour’s on the side of ordinary people, and we’re tackling big business, the big rail companies, the big power companies. We think they’ve got some questions to answer.
PAUL STAINTON: And those are the people that are banking this land.
DANIEL ZEICHNER: Absolutely. The housebuilders, it’s a very small group of people. The developers are very powerful. They’ve got a stranglehold over our system. We want more homes. Communities have agreed them through their local plans. The question we’re answering is why have we got the lowest number of houses being built since the 1920s, at a time when demand is so high. In any other market, the industry would respond by releasing more. The housebuilders don’t. And we think it’s time to change the law, give local authorities more powers to get Britain building again .
PAUL STAINTON: Daniel, thank you for that. That’s one of Labour’s ideas then, to sort out the housebuilding programme, housebuilding mess really, in this country.

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