ENGLAND: 20-year housebuilding targets abandoned for South East

The Government has decided that setting 20-year targets for new housebuilding in the South East is counterproductive and that it encourages excessive building and wasteful use of land. Instead, five-year targets will be in the offing.

How many new homes are needed in the South East has been a matter of intense debate over the past few years, with figures as high as 1.1 million new homes being suggested.

Deputy Prime Minister John Prescott finally ended the argument on 7 March with the announcement that the “old-style ‘predict and provide’ approach to housing provision” has to end. “No one can with any certainty predict how many extra households will exist in 20 years’ time.”

“The changes are very much what we’ve been pushing for,” Tony Burton, director of policy for the Council for the Protection of Rural England (CPRE) told edie. “In our view, it will take some time for the effects of a five-year system to be seen – because there’s already so much land in the [housebuilding] pipeline – but it will make a difference.”

Prescott told Parliament that local authorities in the South East will be advised to plan for 43,000 new homes each year, with a review of that figure to take place at least every five years. He also stated that monitoring must take place, using a series of indicators. In keeping with established policy, 60% of the new homes will have to be built on ‘brownfield’ sites.

The areas where a substantial increase in new homes is foreseen are:

  • the Thames Gateway
  • expansion of Ashford
  • expansion of Milton Keynes

Despite the praise from CPRE and other environmental NGOs, there are also words of warning, that the South East housebuilding announcement constitutes only the beginning of a move toward a sustainable housing strategy. “There is a whole package of other things the Government needs to do – it has to go beyond the planning system,” says CPRE’s Burton.

Environmentalists and local authorities seeking to avoid battles over housebuilding on greenfield sites are waiting to see what measures will be included in the Budget and the Urban Regeneration White Paper, expected to be published this summer or autumn. Of the many financial mechanisms available to the Government, the most obvious is a change in VAT rules. At the moment building on greenfield sites is exempt from VAT, while refurbishing existing buildings incurs VAT charges. It is, according to NGOs, a ludicrous situation that goes against the Government’s aim to limit greenfield building.

Asked whether this Budget is likely to change the VAT rules for building, Burton is hopeful. “We are more positive than we were before,” he says. “Of all the fiscal measures, that is the one that is most likely to be included.” Burton also believes that the Chancellor will signal his intention to develop more financial mechanisms to promote brownfield building over the coming year.

With the contentious South East new homes building announcement dealt with, Prescott’s department will next announce figures for East Anglia, probably within the next fortnight. With Cambridgeshire’s economy booming there are questions regarding the green belt around Cambridge and whether new towns have to be built.

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