Where’s the logic – or industry understanding – in MHCLG’s tactics?

It’s hard to know what to make of what’s coming out of MHCLG these days. One day carrot, next day stick. Next day, carrot and stick – and an industry that doesn’t know if it is screwed, bored or countersunk.

Just in the last week, we had that old annual chestnut from the ministry: the threat of fines for developers that don’t deliver product quickly enough. There’s talk of a “Delayed Homes Penalty”, which really does confound all reasonable logic. Who willingly delays progress on build or sale thereby denying themselves the proceeds? If there are any out there, I guarantee they’ll be bust ’ere long.

Angela Rayner wants developers to sign up to a build timetable as a condition of consent, but what developer in their right mind would willingly do so? Which of us who have ever been responsible for a build project, whether for 10 houses or 1,000, would sign up to a rigid timetable taking no account of weather, build costs, interest costs, subcontractor failures or market conditions?

It’s plain daft, and it is profoundly disappointing that in the understandable drive to deliver more homes, the secretary of state appears to have so little grasp of how this industry works. It’s a bit like complaining about developers who are forced to bank land at a significant cost when the reason they do so is that it’s taking them on average around eight years to get a sensible planning consent.

But hang on, in the same week, we had the announcement that developments from 10 to 50 homes would be exempt from the building safety levy and might actually get funding from the new National Housing Delivery Fund. Where’s the logic? Ms Rayner tells us she wants to build a 1.5 million homes in this parliament, so obviously she should be helping large scale development. But here she seems to favour smaller developments and wants to give them a financial leg up.

Given there is scant evidence of her efforts having delivered anything of consequence apart from reversing a few of her predecessor’s dubious refusals nigh on a year since the election, it is high time she and the rest of this government decided whose side they were on.

Do they still believe all developers are filthy rich and are only out to screw their buyers, or do they realise how important it is to understand how the industry works? If the latter, they might want to look at recent research by the Home Builders Federation, which resulted from Freedom of Information requests of planning authorities and concluded that s106 agreements were adding 16 months to the average planning process.

The research showed that the time to finalise these agreements has increased in the last two years from 425 days between 2022 and 2023 to 515 days last year. It also found that about a third of these agreements took more than a year and the longest took seven years.

Local planning authorities say the problem is a lack of suitably trained staff and they are probably right, but the truth is that s106 and CIL demands by local authorities are killing viability and preventing housing delivery because nobody in the department has even a vestigial grasp of economics.

We cannot address the critical shortage of accommodation unless we deliver more housing during this parliament at a faster pace than the last government delivered. Angela Rayner is right to see that as her goal, but it would help her – and everyone else – enormously if she spent a little time actually finding out what makes the industry work first.