13 February 2014

Paul Clark: Meeting the UK’s housing challenge

One of the most challenging issues facing the UK today is how to deliver substantial numbers of new homes.

The stakes are high and include the sustainability of local communities, affordability of housing and provision of new schools and infrastructure, which all ultimately impact on the UK's broader social cohesion.

With a fragile economic recovery taking hold and the Government's planning reforms truly starting to bed-in at local level, now is the time to bring industry and government together to get homes built. In the absence of government appetite for direct delivery of house building, construction of new schemes becomes the domain of the private sector.  House builders and private landowners (however historic) are not, ultimately, responsible for meeting the nation's housing needs. 

When markets fail it is for government to step in. This is precisely what has happened with recent planning reforms. As a landowner, we are seeing the positive impact that the National Planning Policy Framework is making in simplifying planning regulations and ensuring local councils live up to their responsibilities to establish local plans to direct growth. Localism aims to stimulate development, putting more power in the hands of local people to determine how and where they wish to see development. What it doesn't do is give local communities the power to refuse all prospective development at the expense of providing the new homes the country needs.

The issue of affordable housing, naturally, continues to polarise opinion but commentators often oversimplify the debate. Discussion here should not focus just on the percentages delivered by specific schemes; if we mobilise house building at scale, aspirational homeowners will benefit from an increased supply, helping to moderate price increases.

Stories published this week about The Crown Estate's role in the housing sector, make this mistake and more. Suggesting we should be a social landlord is simply an incorrect interpretation of the legislation that established our business; the idea that 'it's as if time has stood still for Britain's landed estates' could not be further from the truth. After substantial modernisation over the last ten years, our active approach to asset management is no longer akin to a traditional landed estate. What's more, all our profits are paid to the Treasury and benefit the nation.

Our portfolio includes nationally important assets and we take that responsibility seriously, in leasing the seabed for renewable energy development, transforming Regent Street and St James's, or bringing forward rural land for housing. In all cases we act in the same way any responsible commercial business would. Yes, we focus on the bottom line; it's not for us to arbitrarily decide to subsidise particular localities at the expense of our contribution to the nation's finances. Crucially though, we take a long-term view that prioritises commerciality but also considers carefully the impact our decisions have on the economic, social and environmental fabric of the UK.

For us it's not just about stacking up consents. As a substantial long-term rural landowner, we are focused on partnership working with communities and developers alike to deliver a quality and sustainable product to market. Our experience is that local authorities value this approach.

Ultimately though, those with a democratic mandate, not landowners, determine how a development should balance affordable housing provision with contributions to other vital services and infrastructure. Targets are just that, targets, and there is no one size fits all, even within a particular local authority. 

Nationwide, our developments have created over 500 affordable homes in the last five years but have also contributed millions of pounds towards other important local facilities and infrastructure. This week we received planning approval for development of 230 new homes in Wiltshire with 40 per cent being affordable. Nearly half the site will be devoted to new public open space and there will be a substantial investment in local infrastructure such as schools, transport, sports facilities.

We make no apologies for taking a commercial approach as we progress development. That's what Parliament has asked of us, but we do so conscious of the broader impact of our decisions and in line with our core values of commercialism, integrity and stewardship.

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