Geoff Keal, CEO of TerraQuest, discusses a new white paper assessing the impact of recent government policy on the likely availability of land against the backdrop of the government’s goal of building 1.5m new homes over the course of this parliamentary term
The UK’s housing challenges are well documented. There is not enough housing to meet demand and, as a result, it is often unaffordable even for those on above-average incomes.
The reasons behind the UK’s long-term housing shortage are undoubtedly complex. Yet one of its most fundamental drivers – the availability of land – is rarely the direct focus of political attention. This critical issue is the subject of a new white paper from TerraQuest, the operator of Planning Portal.
Plotting the Future examines the factors contributing to the shortage of housing land, revealing their deeply interconnected and multifaceted nature. Crucially, it evaluates measures introduced since the new government took office in July last year, assessing their potential to tackle the challenge of housing land availability.
With the publication of the National Planning Policy Framework before Christmas and the embedding of new policies into legislation – including the much-anticipated “grey belt” – this analysis is especially timely.
The current government has pledged to deliver 1.5m new homes during this parliamentary term. Our white paper provides exclusive insights into how each new measure could help overcome the biggest obstacle to achieving this goal: land supply.
The challenges
There are compounding factors influencing housing land supply, including:
- Existing use.
- Land market factors.
- Property market factors.
- Infrastructure factors.
- Technical factors.
- Planning factors.
Some of these factors are permanent blocks on housing development, while others may only hinder development in the short term.
In Plotting the Future, we dive into each constraint in detail, reflecting on how it can feasibly be addressed by changes in policy and analysing if current measures go far enough.
Planning policy represents a significant constraint on the supply of land for housing. Historically, substantial parcels of land close to major towns and cities have been largely unavailable for housing development as a result of green belt policies introduced with the laudable goal of limiting urban sprawl.
An unfortunate consequence has been to significantly constrain housing opportunities in major economic centres, where the demand for homes is highest.
In Plotting the Future, we reflect on grey belt’s ability to turn the tide.
Likewise, the absence of critical infrastructure can make sites functionally unavailable for housing development.
A poorly performing land market means landowners have less incentive to sell, since they can reasonably expect to be able to achieve a higher price in the future. A poorly performing housing market means demand from developers will be lower, which the law of supply and demand tells us means land values will be lower.
Existing use creates a further limitation on the supply of land for housing. It might be assumed that this obstacle to development is most acute in urban areas.
However, that is not necessarily the case, with a substantial volume of land in agricultural use. Finally, a further category of site is geographically unsuited for development owing to issues such as their predisposition to flooding, a lack of infrastructure or the distance from the economic opportunities of major towns and cities.
Government policy
Since coming to power, the government has pushed housing up the political agenda considerably. Several policies are pertinent to the availability of land and our white paper assessed these measures systematically against their likely impact on land supply.
Naturally, policies that unlock land for development, such as brownfield passports and grey belt, address the constraint on land supply – and in Plotting the Future we reflect on this potential in greater detail.
The government’s New Homes Accelerator, meanwhile, will hopefully lead to a greater understanding of the issues preventing housing delivery at all levels of the industry, while the New Towns Task Force has ambitions to establish new settlements nationally – how do these initiatives stand to impact land availability? Another question we seek to address in Plotting the Future.
Translating policy into delivery
While the government’s policy agenda has real potential to unlock land supply, it still exists only on paper and is untested in the complexity of real-world factors.
Last year, our inaugural Market Index Report revealed that since 2015, over a million homes with planning permission have yet to be built. This underscores that the housing challenge extends beyond fixing the planning process to addressing barriers in the development phase.
For developers, a big concern is the potential effectiveness of government reforms in expanding land availability, which is an issue we directly address in Plotting the Future.
In all likelihood, the most significant challenge hindering our ability to achieve desired national development levels is likely to persist and that is the identification of suitable sites
for profitable housing projects. This underscores the increasing importance of land finding services, such as those provided by TerraQuest.
You can find out more and download the full report here.
