Housebuilders claim victory in row over planning guidance, as ODPM launches two initiatives for homeownership 11

Housebuilders have claimed victory after the government abandoned plans to give councils the power to dictate the size and composition of private developments.

The news comes in the week that deputy prime minister John Prescott announced a five-year programme to improve housing supply for first-time buyers.

The decision to revise the amendments to Planning Policy Guidance 3, which would have allowed local authorities to set rigid templates for private housing schemes, came in a consultation paper released by the ODPM.

Instead of dictating to the industry, the government is now proposing to bring private housebuilders into the planning process at a local level by consulting them on the size, type and price of housing.

In the consultation paper, Jeni Fender, the ODPM’s policy adviser on PPG3, addressed housebuilders’ main concerns. She wrote: “In relation to market housing, the revised approach focuses on the needs of households, and recognises the need to take account of market considerations and to provide a degree of choice.”

She added that each local authority would have to prepare evidence based on the nature and level of housing demand, and work closely with housebuilders.

The decision is a U-turn from last autumn, when the ODPM’s prescriptive plans were outlined. Housebuilders protested bitterly, arguing that it would prevent them from providing the kinds of houses people wanted, and would therefore exacerbate the housing supply crisis.

The new consultation paper was greeted warmly by the industry.

Housebuilder Wilson Bowden said it was delighted the government had heeded the industry’s calls.

The revised plan focuses on the needs of households

Jeni Fender, ODPM

Ian Robertson, chief executive, said: “We are looking forward to continuing to work with the ODPM to ensure that future changes to PPG3 – including the revisions expected later in the year arising from the Barker report – are viable and deliver more and better homes.”

One housing insider said the industry had to learn from the mistakes of the first consultation and have the courage to stand up to the government. The industry only learned of the ODPM’s initial plans through an article in Building.

The source said: “We’re all living to fight another day after the government tried effectively to nationalise the industry with this outrageous proposal. It was utterly impractical.”

Meanwhile, as anticipated, John Prescott launched two initiatives to extend homeownership this week.

  • The first, Homebuy, is aimed at giving housing association tenants the right to buy their homes. There are believed to be 300,000 of them with the resources to do so.
  • The First Time Buyer’s Initiative, meanwhile, will comprise 15,000 homes built by 2010 on public sector land. The scheme allows first-time buyers to take an equity stake in their homes, roughly covering the construction costs, while the government retains the land.
  • The ODPM will aim to tie this initiative in with the competition it is launching with English Partnerships to see if developers and housebuilders can build a house for £60,000. Housebuilders Wates and First Base are among firms that have expressed an interest, although so far the ODPM has only committed to building 300 such homes (see “The £60,000 catch”, left).

David Pretty, Barratt Group’s chief executive, said the industry was keen to support the initiative for first-time buyers, but the plan depended on a number of factors.

He said: “It’s an ambitious target, and it would be just about possible to build a small apartment for between £60,000 and £70,000. However, that figure would be on the basis that the land was available at zero, or minimal, cost and would not take into account roads, sewers and other infrastructure.”

The RICS’ Building Cost Information Service claimed that the drive for £60,000 houses did not tally with the government’s sustainability commitments. It said the government could not build houses at such a low level and maintain its interests in quality measures such as EcoHomes, Lifetime Homes and Secured by Design.

  • It is expected that next week John Prescott will announce that English Partnerships chair Margaret Ford is to stay on for another three years.

The £60,000 catch

Contrary to reports this week that the government is to put thousands of £60,000 homes on the market, only 300 have got the go-ahead. These will be part of a 1000 home development provided on land owned by English Partnerships, which has launched a competition to design a house with construction costs of £60,000. But the full value of the house will be at least double, or even treble this value, once land and infrastructure costs are added. The first-time buyer’s equity stake could end up being more than £60,000, despite the government holding the land.

Wates rises to Prescott challenge

Wates has become one of the first developers to meet deputy prime minister John Prescott’s challenge to build a home with a £60,000 pricetag. The family-owned contractor has unveiled plans for its first development of £60,000 accommodation in a response to the target issued at the Labour Party conference last year. A range of two-bedroom houses and one- and two-bedroom flats priced at £60,000 will be incorporated into the developer’s regeneration project in Whitefriars, Coventry.