One criteria of a fair and compassionate society is a decent home for everyone. Everyone has the right to either own their own house or rent a property at a fair price.
We contend that ultimately land is owned by society and must be used in the interests of the Common Good i.e. for the benefit and in the interest of all. Land that is “owned” by companies or individuals is essentially on loan from society. When land lies dormant and unused over a significant period of time (say 2 years) and is not being used for the Common Good when it needs to be, then in the interests of society, the land can morally be purchased, at a fair price, for society.
The housing problem
Clearly, this criteria of a decent home for everyone, is currently not being met – we need to build hundreds of thousands more homes – annually and urgently. Something needs to be done.
In order to solve this potentially poisonous dilemma (not enough housing for our population), ideologies need to be thrown into the bin!!
For a number of reasons the private sector is not stepping up to the mark. In this case, “the market” is not working with the top 9 builders allegedly possessing over 600,000 buildable plots in the land-banks (1)
The National House-building Partnership (NHBP)
The Government needs to start a “National House-building Partnership.
The Partnership would comprise of three separate companies – the “National Land Purchase Company”, the “National House Construction Company” and the “National Mortgage Lending Company”.
The National House-building Partnership would most likely be a Social Enterprise Company and be solely owned by the Government – in essence it would be owned by society.
The Partnership would be a Triple Purpose Business which places responsibility on all its staff to consider society, the environment and responsible profit in all their decision making.
The National Land Purchase Company (NLP)
The National Land Purchase Company would be solely owned by the government. It would purchase building land at fair prices, if necessary by compulsory purchase. Incidentally, this policy was suggested by Boris Johnson in 2013 (2)
The government would borrow money for this project on the world markets.
Additionally, the NLP would purchase “brown-field” sites, obtain planning permission, work closely with local authorities and make them suitable for house construction.
The National Land Purchase Company would be given powers to speed up the planning approval process.
We accept that establishing the “fair” price will be difficult and much of this project’s success will depend upon establishing this “fair” price. An independent tribunal could be a suitable mechanism.
We also recommend the Government introduces a land tax on land designated for construction. This tax would be progressive year on year. This would encourage owners of building land to either sell the land or build on it.
The NLP would purchase land in areas where houses need to be built whether they be for social housing, low-cost starter homes or for the private sector. In short there would be a NATIONAL PLAN.
The National House-building Company (NHC)
The Government would own the majority shareholding in the House-building Company.
Existing house-builders would be encouraged to become shareholders in the National Housebuilding Company (NHC). Involving existing commercial house-builders in the NHC would go some way to combatting any anti-competition legislation. The share-holding house-builders would compete for business by competitive tender.
The National House-building Company would be a Social Enterprise and would compete against existing house-builders.
The model would allow the share-holding house-builders to make a profit on the houses they build. Their profit would be made from their skills and expertise in building houses not via the increase in the asset value of the land.
As mentioned previously, working with local councils, the NHC would instigate a planned programme of housebuilding to meet the demands of the private sector, social sector and community led schemes. In short, a planned approach to housebuilding.
Other shareholders would include members of the public who would invest say £15k which would become the deposit on their house when it is eventually built.
Other shareholders would be mortgage providers, local authorities and other investment institutions.
We should consider some tax incentives enabling parents to provide deposits for their children.
The National Mortgage Lending Company (NML)
The Government would have the majority shareholding in the National Mortgage Lending Company
Other shareholders would be current mortgage providers. These mortgages would provide mortgages under competitive tender.
The NML would be able to control the level of private and buy-to-let house purchases throughout the country. Again a planned approach.
Inter-company land purchase mechanism
The Land Purchase Company would sell land to the House Construction Company for house construction.
Where houses for low cost starter homes and social housing are required, land could be sold by the Land Purchase Division to the House Construction Division at subsidised rates. In areas where more houses are not required, the land would be sold at a profit. Additionally, where land is being sold for building high value properties, the land again would be sold at a profit.
With this control over the cost of land, the government will have the powers to reduce some of the current regional disparities in house prices and house shortages: for example the North/South divide.
Housing For All Authority (HFAA)
The National House Building Partnership (NHBP) would be regulated by the Housing For All Authority, an independent National Regulator Authority.
The HFAA would oversee the National House-building Partnership by ensuring a fair balance of rental and private accommodation is built throughout the UK
The HFAA would be run by a combination of executive and non-executive people with experience in government, local government, housing, local housing, house-building and industry
Other points and ideas
The Partnership would be a Triple Purpose Organisation. See www.triplepurpose.org
We recommend a National Apprenticeship Scheme to fill the shortage of skilled labour.
We would look to find a financially workable model for local authority rental properties and social housing to be built.
We would encourage imaginative designers and architects, using modern materials and creative construction ideas, to create attractive, low cost, long-lasting, eco-friendly, attractive 1-4 bedroom houses. Perhaps, national design competitions would be considered?
16th September 2016
- The Guardian 30th December 2015 “The nine housebuilders in the FTSE 100 and FTSE 250 hold 615,152 housing plots in their landbank, according to financial disclosures” For more detail see https://www.theguardian.com/society/2015/dec/30/revealed-housebuilders-sitting-on-450000-plots-of-undeveloped-land
- Evening Standard 23rd May 2013. The Mayor (Boris Johnson) criticised “pernicious land-banking” which he said was against London’s economic interests and was contributing to the housing crisis. Mr Johnson told the London Assembly: “It’s pernicious and I would be prepared to use CPO (Compulsory Purchase Order) powers”