Leading UK house buyers up the garden path

Leading UK housebuyers up the garden path

The Government has started 2017 with a firm pledge on housing: today’s announcement to build new starter homes on brownfield sites will surely please those who have long advocated this alternative to building on the Green Belt.[1]

More controversial will be yesterday’s announcement, perhaps deliberately issued on a Bank Holiday in the hopes that it would be eclipsed by today’s news, that 200,000 homes would be built in the new ‘garden villages’ that have aroused considerable local opposition.[2]

Building on brownfield sites is a popular vote catcher since it tends to improve the aspect, infrastructure and safety of unattractive, poorly-connected and possibly contaminated developments.  It has two main disadvantages: first, it is time consuming and complex, so costly and, second, the 66,000 brownfield hectares available are insufficient to meet the UK’s perceived housing shortfall.

But it is a start.  The government has gone some way towards addressing the first disadvantage by allocating £1.2bn to the Starter Homes Land Fund which will support the development of houses for first time buyers on these brownfield sites.  Anyone aged between 23 and 40 will be eligible to buy their first house at a discount of 20% below the market rate on the understanding that they keep it for at least five years.  Calculating the market rate may be an acrobatic exercise in 2017 though.  Current predictions tend to agree that prices will continue to rise although estimates vary from 1% to 4% and Henry Pryor, the maverick market commentator who has been proclaiming the end of the housing boom since 2007, actually thinks that they will fall by 4%.[3]

Henry Pryor’s twitter feed does, incidentally, provide a helpful chronology of the Starter Homes Land Fund, with all of its ups and downs (and there have been a few) from its first mention, in September 2014, to today.

Its bumpy ride is nothing, however, to the storm-tossed waters navigated by the ‘garden’ towns and villages proposal.  The 200,000 dwellings set for construction under this scheme are designed to have gardens – which explains the name.  However, their private green space comes at the expense of public green space and local communities have been vigorously, vociferously hostile to the plans.  Modelled on Welwyn Garden City, initial plans were refined from garden cities to garden towns and have now been further reduced to garden villages, with just three towns left in the proposals.  But each of these towns will have 50,000 new houses.  50,000.  That is about the size of Worcester or Wigan, 50% bigger than Guildford or Harrogate and twice the size of Torquay or Welwyn Garden City, the inspiration for the exercise.  One of the proposed towns will be tacked on to Taunton, the county town of Somerset whose population will be doubled by the gesture.  The story is repeated throughout the country with nimbyish residents questioning the motivation of local councillors and pointing out the road congestion and overburdened public utilities that already prevail in designated areas.

One such is Welborne, Hampshire.  This development, to the north of Fareham, has been hotly disputed by locals who fear that the 6,000 proposed dwellings will place additional strain on a borough that already struggles to provide school places and medical treatment for its population.  The local council, exasperated by the appeals and resulting delays to its plans, voted early last year, to expropriate the land [4]

The council’s leader hails from Whiteley, another new town close by.  A local Whiteley resident presented his views on the Welborne development in the following comment:

“The idea that building 10,000+ houses will bring down asking prices is a fantasy. The developers will control the timing of the number of completions to maximise profits. Our house is now valued at almost 4 times what we paid for it 20 years ago as a new build. This is ridiculous, but here we are. Completing 10,000 houses at the same time might encourage lower prices as it would be a buyer’s market, but that will never happen. As for council waiting lists, there will be little effect on them as none of the new housing will be affordable working with the true definition of affordable, i.e. average working families being able to afford them.”[5]

Henry Pryor thinks that many of these houses will never be built.  Even if they are, the garden variety are unlikely to be priced at a point where they can help to solve the housing crisis.

[1] Green light for construction of thousands of new Starter Homes
[2] First ever garden villages named with government support
[3] House price predictions for 2017
[4] Compulsory purchase order for new Welborne development
[5] New town Welborne delayed 18 months by hold-up in planning applications