Letter from London
The London Pavilion at the Mipim real estate festival in Cannes was busy and buzzy this month. But clues as to how the city is likely to solve its housing shortage were few on the ground. Indeed, much of the conversation revolved around the apparent impossibility of direct procurement by public authorities, writes Paul Finch.
Berkeley Homes, celebrating its 50th anniversary this year, has built more affordable housing over this period than all the London boroughs put together – a claim that has not so far been challenged.
Yet how does the planning and fiscal context encourage or discourage housebuilders from maximising output? In living memory, we did not have planning application fees, the Community Infrastructure Levy, Biodiversity Net Gain, affordable homes etc etc. Only the big boys can cope with this, which explains the disastrous decline of smaller builders over this period.
At a session on the London stand, we heard much about London being ‘world-class’ , which was certainly not true of the stand itself, a pale shadow of the quality delivered when Pipers used the run it. We also heard about the vital role of public/private partnerships, but your correspondent had to point out that (a) what we have in the capital is a world-class housing shortage, and (b) that all the evidence provided by housing completion statistics suggests that these ‘partnerships’ aren’t working.
The diagram is simple: private housebuilders are being forced to deliver a social/affordable housing programme as a punishment for making money out of their ordinary business activities. Unsurprisingly, this is not a happy formula – indeed following the recent declaration of a housing ‘emergency’ – which believe it or not was accompanied by a consultation period about how to deal with it – percentages of affordable homes required were reduced.
In reality the percentage should be zero, with the public sector taking responsibility for the direct delivery of the homes that are sorely needed, especially given London’s massive population increase in recent decades (about 6 million to 8.5 million and rising). What the mayor and government believe is that if they set targets then everybody will jump to deliver them, and that funnelling money to developers, buildings or local authorities will somehow end up delivering more homes than the market requires.
This policy is not working, hence the novelty of ‘new towns’ recently announced, which might more accurately be called ‘urban extensions. It was disappointing that the task force which identified locations for development was stood down even before the decisions were announced.
One of the team, former housing and planning minister Nick Raynsford, once told me that the last time housing supply met anticipated demand was in 1978, when there were four suppliers: private housebuilders (then as now); housing associations (many of whom now take affordable supply from housebuilders rather than directly procuring); local authorities (some of whom in London are active, but overall numbers are a shadow of what they were); and new town development corporations (we haven’t got any).
If you take out or severely reduce the output of three suppliers in a four-supplier market, guess what happens? The shortages we now see, absurdly described as an emergency or a crisis. What we have is a condition which is the result of a massive political failure on the part of the short-sighted ministers and local politicians, from across the political spectrum.
One response is to fiddle with regulatory systems, in the hope that a tweak here or there will somehow resolve this situation. An example cited at Mipim by the government chief planner was a tweak to the regulations covering government interventions to prevent planning refusals for significant housing applications (150 homes or more). In future, Whitehall will be able to block directly local authorities from refusing such applications, with no preamble discussions.
There is also guidance to smaller builders about how they can negotiate the planning system and by using appropriate designs get speedy approvals, at least in theory.
However, the idea that yet another tweak to the National Planning Policy Framework will have much effect on housing output seems fanciful, given the external pressures on housebuilders in terms of labour and material costs (or shortages). And how could this affect a new challenge for the housing sector: competition for sites, not between builders, but involving non-housing development.
Berkeley Homes has twice been outbid for sites where they contemplated building hundreds of homes . . . by self-storage companies! They, of course, will pay no CiL, will not be obliged to provide affordable housing etc etc. What a way to run a railroad. We should not be penalising housebuilders, but creating a fiscal environment in which they encouraged to build. As for the market, the provision of mortgage finance is something that has yet to be examined by London local authorities, even though in living memory, local authority and Greater London Council mortgages were the way many people climbed about the housing ladder. I was one of them.
*******************************
WAF took part in two fruitful events down in Cannes. One was a reception for architects, hosted by Turkish Stones. It was good to see old friends and indeed super-jurors (Murat Tabanlioglu, Manuelle Gautrand), and to hear about the extension of production facilities that is allowing Turkish stone to be processed and carved internally, rather than being sent abroad.
A more formal event was a discussion lunch hosted by Schindler, where a group of international architects reflected on the increasingly hybrid nature of buildings and environments, and the changes in vertical transport infrastructure.

Schindler have recently gone totally digital in provision of their services, cleverly displayed on their Mipim stand, completed with sliding doors and panels. The immersive experience of the elevator cab gave food for thought – what would you like it to look like? – as did the examples of multi-use buildings where elevator technology could provide sophisticated ways of separate but technically integrated delivery methods.
One slightly unexpected discussion point concerned cores, not least in relation to refrofit/adaptive re-use projects. On the one hand some developer clients would be interested in slimmer cores in order to maximise net lettable space. On the other, the multiplicity of uses in hybrid projects meant larger cores.
The carbon implications of all this are, of course, complicated. Discussions will continue!
Founder Partner
