Strangled by many hands

PPG3 guidelines have undoubtedly restricted the supply of new houses, particularly in the South, and fuelled the house price rises of recent years. Housebuilders are unable to meet the demand because of restrictions on land use, and with no sign of a relaxation in planning guidelines, the shortfall could well get worse.

First-time buyers are suffering particularly. Their share of mortgages fell to a record low of 29% in February. Four years ago, this figure was 51%. First-time buyers were in a less dire position at the peak of the 1980s boom. The recent increases in National Insurance contributions and council tax will only worsen their plight, and that of low-income buyers.

The great winner from this situation is the government, which has received huge sums from stamp duty and the big increases in house price inflation. Those at the bottom end of the property market previously managed to stay below the stamp duty threshold, but it is now extremely difficult to avoid it in the South.

The South's problems could be rectified with a change in government thinking on strategic greenfield development. Following a rush to snap up brownfield sites for development across the South, opportunities are rapidly reducing. Not only are there fewer brownfield sites, but time spent on land reclamation and the laborious planning processes make building on them excruciatingly slow. On the other hand, the time taken to develop a greenfield site is fast, homes are brought to the market quickly and demand is met.

Take, for example, the two developments of Bristol Harbourside in the docks area and, by contrast, Emersons Green to the north of of the city. Bristol Harbourside has stood largely derelict for decades while arguments raged over design and the balance between residential and commercial uses. Parts of the site are heavily built on, too, which will be a major obstacle to the developers. Emersons Green, on the other hand, saw a quick roll-out on greenfield land – and offers plenty of opportunity for first-time buyers. Granted, each development has a totally different appeal – but with the increasing demand for homes from first-time buyers and low wage earners, the need to continue building developments such as Emersons Green is strong. Brownfield cannot meet all of today's needs – in this country, people aspire to live in reasonably sized properties with gardens and garages. Not everyone wishes to live in flats or on high-density developments.

There is simply not enough space to build the required homes under the 60/40 Green/brown ratio

Protecting the countryside is necessary, but PPG3 has been too big a constraint on the market. It has not taken into account the growing population and the need for new housing of all types. Pressure groups will always play their part to protect greenfield and many high-profile developments that have been shot down by their flak. But likewise, many developers are now looking very closely at brownfield sites where affordable housing allocations (in some cases as high as 50%) make a development uneconomic.

Landowners will be the biggest losers; they will tend to hang on to their land if its value cannot be maintained. Many developers are finding it difficult to recoup high reclamation costs, let alone make a profit. The market is being strangled by many hands.

There is simply not enough space in the South to build the required number of homes under the 60/40 (brownfield/greenfield) planning guidelines, which have been driven by politics. It is easy to artificially deliver the 60/40 ratio by reducing the output of greenfield development, rather than increasing the brownfield output.

By increasing this ratio in favour of greenfield sites, the industry will be in a better position to address the mismatch between supply and demand. This will go some way to help reduce unsustainable house price inflation and steady the market in future years. We have seen the government take some steps towards this with the creation of key worker settlements on greenfield land. An extension of this policy is urgently needed.