Richard Bacon MP: Providing the tools to build a stronger housing market

7th May 2014

Tory MP Richard Bacon explains how self and custom-build will increase the choice for housing customers, potentially creating a new normal for the housing market.

What do people spend most of their money on? For nearly all of us, whether renting or buying, the answer is where we live. And yet there is more choice in the market for apples or for beer or even for toothpaste than there is for housing. It is an extraordinary paradox that where people spend the most money, they also have the least choice.

This happens because of the collision of three facts. Fact One is land, which is not just scarce they have stopped making it. In order to deal with the land problem, we have invented Fact Two, planning, with a plethora of rules and regulations, thankfully slimmed down by the government but still having to cope with the intrinsic tension between competing potential land uses. Fact Three is our stock market. The large national housebuilders having relatively easy access to large amounts of capital buy up nearly all the potential building land and then sit on it, landbanking until they need it or trading it among themselves. They build houses to a small number of standard designs that are repeated again and again in different parts of the country.

Then there is the Conversation Problem. It is much easier for the local council to talk to a small number of these large national housebuilders and to prise out of them a new primary school or a community hall than to ask for the opinions of large numbers of individuals, who elsewhere would be known as customers.

The result? As Kevin McCloud of Channel 4s Grand Designs has put it: The consumer has been on the receiving end of a pretty poor deal. We build some of the poorest performing, most expensive and smallest homes in Europe. Thats not something to celebrate.

It could be quite different. 53 per cent of the adult population would like to build a house at some stage in their lives. 30 per cent would like to do it in the next five years. 14 per cent are currently researching how and what to do and if they can finance it. More than one million people want to buy a site and start in the next 12 months. (IPSOS MORI poll).

There are exciting possibilities here for the whole skills agenda, but this is not about everyone learning how to become a plumber or an electrician. Most people would use a builder as a general contractor, if only they could get a piece of land. In the German Baugruppe model, like-minded individuals club together and build a community, including homes for rent and for those on modest incomes.

We have to make it easier for customers to express their choices. The government has started to recognise the potential, with a 150 million reusable fund to help develop serviced plots, where all the most difficult parts getting in the roads, sewers, electricity, gas, and water are already dealt with. This could be the new normal, if we started treating the building of houses as if customers mattered.

Richard Bacon is Conservative MP for South Norfolk and Chairman of the All Party Group on Self-Build, Custom-Build and Independent Housebuilding

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Richard Bacon MP: Providing the tools to build a stronger housing market