Arguing over planning gain is to miss the point

The current plans about building housing fail because the arguments are about entirely the wrong thing:

Strict affordable housing rules proposed by Angela Rayner will make construction projects unaffordable and derail her goal of building 1.5m homes by 2029, an executive at the UK’s biggest housebuilder has said.

The planned target, for 50pc of properties on green belt developments to be affordable, is “baffling” and risks ruining the Housing Secretary’s broader ambitions, according to Philip Barnes, land and planning director at Barratt Developments.

Don’t forget, affordable here doesn’t mean cheap - something achieved by just building more - it means below market price.

The wider industry backed Mr Barnes’ views on Linkedin. Patrick Murray, executive director of policy and public affairs at Northern Housing Consortium, wrote: “The reality is subsidised housing needs subsidy and it can’t all come from landowners.”

Well, yes. But what’s happening here is that the planners are looking at the effect of the grant of planning permission. This - massively - increases the value of that land that now may be built upon. So, the demand that landowners subsidise that affordable housing. Plus the associated Section 106 demands that they build schools, GP surgeries and all the rest to go along with the new housing. There’s a chunk of profit there at the stroke of the bureaucrat’s pen so, well why not?, a chunk of that profit should pay for local goods.

They why not is that there shouldn’t be planning uplift. There is no good reason at all that that stroke of the pen should increase the value of the land. Why would we limit building permissions? The only effect of that is to make the houses finally built more expensive after all. The aim of a rational planning system is to reduce the value of planning uplift to nothing.

At which point, of course, we don’t require specially labelled “affordable” housing for all housing will then be cheap. Which sounds like a plan really. Just issue so many planning permissions that none of them are of any value. Or, obviously, just abolish the Town and Country Planning Act 1947 and successors - blow up, proper like, kablooie - and be done with the idiocy itself.

Tim Worstall