The government’s Levelling Up and Regeneration Bill needs to focus on making housing more abundant and more affordable, argues Northampton MP Andrew Lewer. Home ownership, he says, should be put back in the hands of younger citizens and their families.
Andrew Lewer is MP for Northampton South. He is a member of the Levelling Up, Housing and Committees Select Committee in Parliament and chairs the All Party Parliamentary Groups for, among others, the Private Rented Sector and for SME Housebuilders.
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HOUSEBUILDING in the UK faces a number of deep and problematic challenges as it enters 2023. Some of these are relatively recent like global supply chain issues following the various Covid lockdowns, invasion of Ukraine and of course the return of international inflationary pressures.
Others are more established and entrenched, causing very worrying trends. Supply is woefully not keeping up with demand and it is having devastating consequences.
House price growth has skyrocketed and has outstripped the growth in wages. In 2019, the median house price in England was around 7.8 times higher than the median annual earnings of a full-time worker. The ratio has increased from around 5.1 in 2002. In London, the ratio in 2019 was considerably higher at 12.8. Homeownership has become increasingly out of reach for younger people. In 2003/04, 59% of those aged 25-34 were homeowners. By 2020/21, this dropped to 47%. We are also seeing an overall general decline of homeownership.
Rental demand is up 142% when compared to the five-year average while supply is down by 46% over the same period. Rents are soaring as a result and I imagine this will most certainly further increase homelessness numbers.
In short, we need to radically increase the supply of all types of housing to meet demand and put homeownership back into the hands of younger citizens and their families by making it affordable again and in plentiful supply.
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Main picture: Andrew Lewer (centre) with property developers Alpesh Khetia and Anthony Perry
on one of their small housing sites in Northampton.
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The housing market is essentially broken and overdominated by a few major housing construction companies operating in a disproportionate and complex planning system which limits and distorts outputs. It is in this context that I was vocally opposed to the government dropping its critical housing targets commitment when the Levelling Up and Regeneration Bill was passing the report stage in Parliament back in December.
This will just increase the sludge on the supply path, making it much harder to get housebuilding through planning further fuelling house prices to even more unreachable levels.
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“Supply is woefully not keeping up with demand
and it is having devastating consequences.”
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Another dangerous trend emanating from the housing market is the near extinction of the SME housebuilding sector. A good marketplace has a healthy and diverse number of suppliers offering a wide range of products.
SME housebuilders are an essential component of the nation’s construction industry. As smaller operators they tend to take more risks and be more competitive. They are more likely to be using and developing innovative technologies like modern methods of construction as a means of attaining competitiveness in the marketplace.
35 years ago, they were responsible for almost 40% of all housebuilding. That has shrunk to about 10% and the number of SME housebuilders declined by a whopping 80% over the same time period.
This is why I tabled an amendment to the Levelling-Up and regeneration Bill to introduce a Small Sites Planning Policy offering a more permissive approach to planning for those developing small sites which offer the majority of homes as affordable housing.
Sites still need to conform to more general development policies and must be designed in a manner that observes and adds to the existing character of the area but this would be a critical path to opening new opportunities to this declining but vital construction group and it would also help contribute to regeneration in urban neighbourhoods.
Housebuilding is a critical part of our national economic and social eco-system. It is imperative we rebalance the sector, make it easier to build lots more homes and end the scandal of millions having their noses pressed up against the glass wall of the permanent, expensive world of renting.