The scale of the housing crisis is now as great as it was in 1951. That was the year in which Harold Macmillan, then housing minister, made his famous pledge to build 300,000 new homes a year. His success in achieving it helped pave his way to Downing Street. But decisions he made then can now be seen as the root of both the current critical shortage of homes and the matching inflation in values which so distorts housing policy. This is what the much-delayed housing white paper – due before the end of the month – has to tackle.
In Macmillan’s haste to meet his eye-catching commitment 66 years ago, many homes were built to inferior standards. In the later case of Ronan Point, the 1966 London tower block that collapsed catastrophically two years later, speed of construction overwhelmed the safety and security of the people who lived there. Just as significantly, it was during Macmillan’s premiership in the late 1950s that the private sector overtook the public as the nation’s leading housebuilder, for the first time since 1939. Public sector housebuilding remained significant for 20 years, but never regained its pre-eminence.
When the squeeze on council spending began in the second half of the 1970s, council housing was an early and lasting casualty, but building for sale did not increase to fill the gap. Without a steady supply of homes for rent, the conditions for today’s housing shortage were set. Private builders maximise value by preferring fewer, larger homes, unaffordable to first-time buyers. It is rational to keep prices up by releasing new builds slowly, and there is little incentive, once planning permission is granted, to fulfil commitments with community value such as primary schools, parks and GP surgeries.
Ever since, governments have been trying to unpick this tangle, but with only half the tools they need to do it with. To have a chance of meeting its commitment to build a million homes by 2020 – a target itself widely considered inadequate – this government must build at scale. Last week, the sites of 14 new garden villages were announced, promising 48,000 homes: these new settlements have few of the values of place creation, community value and housing standards that made Letchworth, the original and best surviving of the garden cities first proposed by Ebenezer Howard, one of the most successful urban developments of the 20th century. All the same, they will, one day, provide thousands rather than hundreds of new homes, and they offer a better chance of the kind of thought-through planning that is making Prince Charles’s Poundbury, an urban extension of Dorchester, look less of a royal eccentricity and more like a model of community creation.
But Poundbury has been 20 years in development. The government’s target is 2020. The private sector won’t meet it. A bigger role for housing associations, the main builders of social homes, needs changes to financial legislation to permit more borrowing. At last the government recognises the part that councils must play. Devolution settlements give larger local authorities new powers; they want to be able to control the speed and style of housebuilding too. That goes further than the new fund, announced in November’s autumn statement, that is intended to enable them to fund the complex financial and legal work necessary for big new developments. As an IPPR report concluded in October, what is needed is an active deal-making process between the devolved authorities and Whitehall, where the former release public land and invest public money in developing local skills. In return, the government rationalises funding streams, allows retention of stamp duty on new builds, and devolves control over council tax to shape types of tenure.
Harold Macmillan laid the groundwork for the privileging of home-ownership over social housing. The housing white paper is the moment to recognise that, until homes for rent are firmly back in the mix, there will be no end to the housing crisis.