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Nick Johnson: 'Owning a home is a very colonnial obsession'

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Nick Johnson, former deputy chief executive of Urban Splash, on the UK housing crisis and why alternatives to home ownership are the way forward

‘What is it about housing that the government simply doesn’t get? It’s not just the coalition, housing policies have been in tatters since the turn of the millennium.

Remember Labour’s suggestion that house-price rises were a ‘supply-led’ issue and lack of supply was the principle factor pushing prices up and making it unaffordable for first-time buyers? The proposition then was that building more homes would have a deflationary effect on house prices due to the basic economic principles of supply and demand – missing completely the principle factor, which was the easy availability of cheap money.

Then there was John Prescott’s loudly trumpeted call to the industry to build the ‘£60,000 house’. Architects teamed up with builders to conceive and construct a house for £60k. That’s about as relevant as asking how much it cost to build your Audi or make the beer in your glass… What something costs to build and what it costs to buy are two fundamentally different things. Of course you can build a house for £60,000 but with the cost of the land, the fees, the finance, the profit, that £60k house actually costs over £175,000 to buy.

Prezza was also responsible for the disaster that became the Housing Market Renewal Initiative (HMRI) aimed at ‘slum clearance’ in, principally, northern towns where, in spite of the buoyant market, the housing market had failed – namely Accrington, Burnley, parts of Manchester and Liverpool. I suggested to Prescott the strapline should have been ‘HMRI – it’s got nothing to do with housing’, because it was the potential of these existing perfectly good places that needed be re-thought and re-imagined to create sustainable patterns of demand for perfectly good properties. For example, Burnley could be re-cast as a thriving market town on your front doorstep, with Pennine parkland at your back door. Tony Wilson, before his death and following his reinvention as a then fashionable-as-pop ‘urban regenerator’, posited that area reinvent itself as ‘Pennine Lancashire’.

Will Alsop-designed Chips housing development in New Islington, Manchester

Will Alsop-designed Chips housing development in New Islington, Manchester

Then there followed the abolitionist zeal of the coalitionistas – out with public sector intervention, out with the agencies promoting design quality, in with new-found freedoms and liberties, such as the ability for registered social landlords to charge near market rents and raise capital. The impact turned out to be mainly in the capital because social rents and market rents were already on a par outside of London and the South.

In with the New Homes Bonus – a reward to those authorities for granting planning permissions, which was paid by ‘matching’ council tax for six years. No surprises that Tower Hamlets will receive a whopping £16 million in 2013/14 while Pennine Lancashire’s Hyndburn gets £5,320.

At a time when fewer new homes are being built since 1923, shares are trading in the quoted housebuilding sector at their highest level since the 2008 crash. Land banking not housebuilding appears to be the ‘just’ reward of recent policies.

Mark Prisk enters the housing debate at a critical time. As a chartered surveyor, one hopes he has at least a tenuous grasp of basic housing economics even if, for now, he tows the Gove-ian line that design costs money and money spent on design and designers is a flagrant and wilful waste. Let’s hope that, unlike his predecessor, he is honest enough to admit to a problem and prepared to listen with an open mind to his critics.

Quality of design is an integral component to driving value, creating desire, driving demand and thereby delivering numbers. Lenders need to be sorted out and sing from the same hymn sheet, and we need to accept that owning a home rather than renting one is a very British, very colonial, obsession that could do with changing.

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