A day of challenges, solutions, pleas, analysis and “a strong message” from government to the industry – Ben Roskrow reports from this year’s HBF Policy conference
The message from communities secretary Sajid Javid to the audience at the HBF Policy conference last month was strong and clear: “Let’s work together to give everyone in this country the safe, secure, affordable home they need, they want and they deserve.”(Pictured) Communities secretary Sajid Javid called on all parties to work together to deliver good homes
And with that message came challenges too from Javid – challenges on quality, on design and on fair and acceptable sales terms for new homes.
(Pictured) From left to right – Barratt ceo David Thomas, HBF executive chairman Stewart Baseley and conference chair Martina Lees enjoying Lucian Cook's presentation
The conference – chaired by Sunday Times property correspondent Martina Lees, was staged a few weeks after the publication of the Housing White Paper, allowing everyone time to digest some of the detail and give an informed view. Javid was, of course, positive about the document, but his positive message also had a challenging tone: “I can’t force you to build more homes,” he said. “But what I can do is make it as easy as possible for you to build more. I can remove the barriers, I can unblock the system, I can speed things along. In short, I can take away the reasons you may have not to build. And that’s what the Housing White Paper is all about.”
HBF executive chairman Stewart Baseley had earlier in the day also welcomed the White Paper. “It was not the radical document that people thought it could be, or hoped it might be or feared it would be. But overall it was broadly positive – at heart it is a consultation document despite being called a White Paper.”Radical policies
And Barratt chief executive David Thomas had a similar view: “In the past we have seen too much talk of radical policies that have not delivered,” he told the conference. “The Housing White Paper includes measures to speed up planning and increase land supply.”
Perhaps unsurprisingly shadow housing secretary John Healey was less effusive. “The only radical part of the Housing White Paper was the title – Fixing our Broken Housing Market”, he said. “This led to an expectation that something would be done to deal with the problem. Faced with seven years of failure of housing on all fronts we were promised a bold, radical plan – instead, it was, in some parts, feeble beyond belief.”(Pictured) Shadow housing secretary John Healey said Help to Buy should be better targeted
In addition to outlining the plans in the White Paper, Javid went on to challenge the industry on quality and design.
“Housing is one of the few areas in life where newness is not always considered a virtue,” he said. “Where many people, if they are given the choice, would rather go for the older, tried and tested option. It’s fair to say that new builds don’t always have the best reputation for quality. In 2017, there’s really no excuse. I want to see every new home built to the highest possible standards. And not just technically, but aesthetically too.”
He also challenged the industry on unnecessary use of leasehold terms. “If you go to John Lewis and buy some new crockery, for example, you’ll get a receipt and know that you’ve paid for it and it belongs to you. End of story. You won’t expect the company that made it to send you an annual invoice for the next 100 years.
“Yet if you’re about to complete the process of buying a new-build house, (this is) exactly (one of the) problems you might find yourself facing. The simple truth is that too many new houses are being built and sold not on traditional freehold terms, but as leaseholds.”
Although he acknowledged that some housebuilders were addressing this issue, Javid said: "I don't like legislating to fix problems like this, but I don't see how we can look the other way while these practically feudal policies persist.
“So I will look to ensure Help to Buy equity loans are only used to support new build houses on acceptable terms. This will send a serious message to the building industry: if you want the government to help you build and sell homes, you have to sell them on fair terms.”
Help to Buy featured several times during the day. Barratt boss Thomas told delegates that the government must give the industry clarity on extending Help to Buy equity loan beyond 2021 "as soon as possible". He said that all parties needed to take responsibility for delivering the homes the country needs. And for government, the priority must be Help to Buy.
"80% of buyers with Help to Buy equity loan didn't think they would have been able to get on the housing ladder without it," said Thomas. He said that Barratt is now building and selling on sites that will stretch beyond 2021 and so with no Help to Buy beyond 2021 investment in land and building will decrease.Absolute priority
"A Help to Buy extension is an absolute priority for the government," said Thomas.
Responding to this Javid accepted that it was important to set out a future for Help to Buy which presently runs until 2021. He said he hoped details on how it will progress will come "quite soon".
Healey was critical of Help to Buy and said it should be more targeted on those it should be helping.
“Help to Buy looks to many like a blank cheque from ministers that housebuilders are cashing in,” he said. “Since Help to Buy was launched the FTSE share index has risen 17%, while housebuilders share prices have risen 90%. I am not arguing that Help to Buy should be scrapped but it should be targeted at those that need most help – first time buyers on ordinary incomes.”
Away from the politics and the politicians, the conference was treated to a mass of information on the market, skills, planning and offsite manufacture. Lucian Cook, director of residential research at Savills and HBF policy director David O’Leary provided a wealth of information, graphs and stats detailing housing supply, transactions, prices and regional variations. Among all this, O’Leary’s analysis of voting in the 30 constituencies with the most Help to Buy sales was particularly enlightening. His research found that in these constituencies the Conservatives saw their 2015 vote increase in 24 of them, retaining the 21 they held and gaining four – two from Labour and two from the Liberal Democrats. “The Tory increase in their vote in these constituencies was 2.5 times the national average,” he said. Turnout among owner occupiers, he said, was much higher than among renters.(Pictured) Savills director of residential research Lucian Cook delivered his housing market outlook
James Lidgate, director of housing at Legal & General Capital, addressed the audience on the group’s involvement in housing, looking at the work of Legal & General Homes, the group’s ownership of CALA and its investments in strategic land. Of much interest was the progress of the work at its modular homes factory outside Leeds, which is producing cross-laminated timber modular homes. The factory, said Lidgate, will be capable of building 3,000 to 3,500 homes a year and is expected to get to 65 to 70% of capacity next year.
HBF planning director Andrew Whitaker (left) and Mark Aedy (right), md of Moelis and Company, listen in at the HBF Policy conference. Whitaker entertained the audience with a lively run through of the big issues facing planning, while Aedy presented the outlook for the sector, finding seven reasons to be cheerful. These included a benign land market, government support, historic underbuild and positive demographics.
Innovate to boost supply
Industry and local government has a key role in increasing supply, Barratt ceo David Thomas told the conference. "There is no simple solution, no one group can shoulder the responsibility. We need to stop throwing bricks at each other – local government blames the housebuilders, the housebuilders blame the planning system, central government threatens sanctions. We must all take responsibility."
Local government, he said, had to react positively to the Housing White Paper. "Planning positively for communities is a must have, not a 'like to have''" he said. "Local government must not duck tough decisions."
The industry's responsibility, he said, was to deliver the homes the country needs. There should be a focus in terms of skills and innovation. "We need more people to build homes and we need to build homes in different ways. The industry must invest in modern methods of construction, focus on innovation and reduce the reliance on traditional skills."
Through this period of growth quality must be key, said Thomas. "Being busy is not an excuse not to have good quality build and customer service."