UKCW 2018

NEC BIRMINGHAM   09-11 OCTOBER 2018

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John Tutte is at war with Britain’s newts. And hibernating dormice, and bats, and nesting birds. Nature is getting in the way of solving the housing crisis.

These species are protected by EU legislation, and house builders like Tutte, who is chief executive of Redrow, have to work around their schedules.

The newts in question, which are great-crested, are very rare in some parts of the EU, such as Spain, but are commonplace here. “The UK has the largest colonies of great crested newts in the whole of Europe,” he says, with the tone of someone who has thought a lot about these amphibians with their bulbous tails. “We haven’t got a shortage, there’s no threat to great crested newts in the UK, but it’s European legislation.”

When applying for planning permission to build on a site, the developer has to comply with the rules protecting them.

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This is obviously a deep preoccupation at Redrow; earlier this year the chairman and founder of the company Steve Morgan said that “it seems that in lots of places it’s more important to preserve the habitat for a newt than for people”.

The newts are not just plaguing Redrow: it was claimed by property developer Lord Borwick in a debate on housing that protesters had introduced the species on to proposed development sites to get work halted. Harming the habitat of a great crested newt can result in an unlimited fine and up to six months in prison.

Recent changes to rules about the protection of newts by Natural England mean that house builders can move them off the site to another colony. But even this is fraught with problems and bureaucracy, says Tutte. “You can’t collect and transport the newts to new sites if the temperature is below 5 degrees. So it writes off the winter for being able to do those works on the site.”

It’s the same story for other animals, he says. “If you get planning permission you will not be able to start on site if you have ecology issues because of hibernation seasons.

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“One particular site [near Cheltenham] had dormice, so that meant that we can’t start on the site until spring the next year, but then the issue is you have the bird nesting season. So there’s a very small window of trying to start work on a site.”

It’s one of many gripes Tutte has with the planning process, which he sees as being the main obstacle for house builders. It’s under-resourced, having been hit by cuts. It’s political too, with the most resistance in areas where housing need is most acute. Redrow builds family homes, increasingly focusing on the commuter belt around London, where it is facing much of this opposition in planning meetings and in the courts when opponents call for a judicial review.

It doesn’t help that the system has become chaotically bureaucratic, with planning officers piling up conditions on archaeology, trees, infrastructure and ecology which must be met before any spades can hit the ground. That’s before planners turn to the style of brick and roof tiles and how the homes are positioned.

“Twenty five, 30 years ago you had a handful of conditions,” he says with a weary expression. “Now, it is not unusual to have up to 50 conditions attached to a planning permission and many of those have to be satisfied before you start on site.”

Tutte believes these frustrating planning problems are holding up homes being built, and is one of the reasons for accusations of land-banking by major house builders.

Some, including the Government, argue that developers are deliberately restricting supply, sitting on land which already has planning permission, and are refusing to build, inflating their profits and pushing up demand.

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In a strongly worded attack on house builders at the Conservative Party conference this year, the communities and local government minister Sajid Javid called on them to “release their stranglehold” on land, citing an almost 60pc increase in permissions since 2010, compared with just a 12pc increase in homes built.

A House of Lords report this year called the private house-building sector “oligopolistic”, saying the eight largest builders, which build half of all new homes, were “restricting the volume of house building to maximise their profit margin”.

Tutte argues that these attacks are directed at them because the industry is “a bit fragmented, and an easy target”. Much of the land at they have can’t be built on yet, he says, because the conditions haven’t been met.

He adds that this is a way for the Government to deflect blame after “pinning their colours to the mast” by declaring it would build a million homes by the next Parliament.

“They set themselves a target that is... ambitious would be an understatement. I don’t think there’s much chance of them ever delivering a million homes.”

The slapdash style of the planning system is not helping matters, he says. To reach that target of 200,000 new homes per year, local authorities “identify their land supplies and hope it all adds up to the right number”.

“You will not hear what the tenure of these new homes will be [whether they are rented, affordable, or for private sale], and where they are to be built. Which is absolutely fundamental because it’s no good trying to increase housing output and build 50,000 new homes in the North East, for instance, when there is not the demand.”

Besides, the Government has a lot to answer for, he says. It announced its starter homes initiative 18 months ago, with the target of creating 200,000 homes at a 20pc discount, but then never elaborated with any detail. As a result, builders have been left in limbo.

“I don’t think it’s given the industry the credit for the increase in housing numbers that it has produced, particularly the major house builders", he says.

“It has increased output dramatically from 2010. Even over the last two or three years housing output has probably gone up by about a third among the major builders.”

Redrow itself built 4,716 homes in the 12 months to June, up 17pc from last year, and reported record pre-tax profits of £250m, up 23pc. The sector is “very profitable, so people will point fingers at the industry, but they tend to forget it went through some pretty tough times in the recession.”

One way to increase the number of homes built would be to increase the number of sites, he says. This would be unpopular with planning officers who would have more work to do, but it would increase output. There is hope on the horizon for frustrated house builders and overworked planning officers: the Government’s eagerly anticipated White Paper on housing, which should materialise in the new year, could produce something to bulk up the system, such as increasing planning fees. On the face of it, the policy is unexciting, but it is vital to speed up the process.

Tutte also thinks that after Javid’s comments, measures to combat landbanking may be included too, such as having to produce more affordable homes if building doesn’t start within a time period.

Redrow’s fortunes are tied up with those of Help to Buy, the government scheme to get people on the housing ladder, which allows them to pay a 5pc deposit. Last year, 44pc of its homes were sold using the programme. They are at the lower end of the price scale with the average price of one of its homes last year under £290,000. It’s due to end in 2021, a worrying prospect for Tutte.

“There will have to be a transitional move,” he says. “I don’t think first-time buyers have ever been able to buy a house without some kind of support. It used to be tax relief, then it was some pretty loose lending, with 100pc and 110pc mortgages – that was all tightened with the Mortgage Market Review, and now you have Help to Buy.” He argues that it should be continued but restricted to first-time buyers.

It’s clear that he worries about the future, not necessarily for his company but for the potential first-time buyers he wants to sell to. For those who can’t afford home ownership, what will they do in retirement, he asks. “Their incomes will be significantly lower because of what has happened to pensions, and therefore they are going to be saddled with paying open market rents when their incomes are 50pc lower,” he says. “There’s a much bigger picture here.”

Source: The Telegraph

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