Planning reform and a recovering SME sector will help bring good design back to new housing, says housebuilder Theo Backhouse
Ten years ago, the UK’s housebuilding businesses were facing serious trouble. As the American subprime crisis became the global finance crisis, even our largest housebuilders – whose current bumper profits seem to be almost weekly news – suffered a major downturn of investor confidence.
But the damage this did to our housebuilding sector was more than just financial. By starving the SME sector of finance – a sector that used to produce more than 70 per cent of our new homes – it caused a widespread consolidation, driving down competition.
This effectively removed the need for housebuilders to compete on design and innovation and reduced architectural involvement in the sector.
Britain is dramatically failing to provide the choice, variety and design quality of housing that a successful nation should aspire to
Britain is a powerhouse of architecture and design. It is also a country that is dramatically failing to provide the choice, variety and design quality of housing that a successful nation such as ours should aspire to.
The root cause of this irony is ultimately policy. For too long our land-use rules have prevented the building of adequate numbers of new homes. And buyers struggling to find a house within their budget have not been in a position to demand better of their housebuilders or landlords.
So, while it is tempting to suggest that housebuilders be forced to use architects – as architectural heavyweights such as Jonathan Meades have done – continued support for land-use reform is likely to be more palatable and more effective.
Thankfully, things are already improving. A shift in political will has driven significant positive changes to our planning rules. The increasing number of land promoters, who take land through planning and then sell it on to builders, is fragmenting the land market and reversing some of the post-crisis consolidation in the industry. The healing of the financial system is allowing SME housebuilders to access finance once more.
The average Briton believes nearly half of the UK’s land is densely built on – the true number is closer to 0.1 per cent
Taken together these changes mean that activity in the housebuilding market will increase and with it will come increased competition. As competition bites, design and innovation will become key to competing in British housebuilding, as it is in almost every other consumer product market.
There is still work to be done. Recent research has shown that the average Briton believes that nearly half (47 per cent) of the UK’s land area is densely built on. In reality the number is closer to 0.1 per cent. Misconceptions of this magnitude have the potential to do real harm to the political will required to build a better Britain.
But if policy-makers can be encouraged to stick to their guns and continue their focus on unlocking land and simplifying planning, they will free our architectural talent to produce better houses in every region of the UK.
The current direction of travel points to a design-led resurgence of the SME housebuilder. With a strong understanding of their local markets and an ambitious and nimble structure, SMEs that put design and innovation at the forefront of their offering are likely to succeed as consumer choice increases.
Theo Backhouse is founder of housing developer Backhouse