Self-Build and Custom Housebuilding Independent Review

Greener and House kinder living How putting customers in charge can change everything

THE PRIME MINISTER’S INDEPENDENT REVIEW TO DEVELOP A PLAN FOR A MAJOR SCALING-UP OF SELF-COMMISSIONED NEW HOMES – ACROSS ALL TENURES – TO BOOST CAPACITY AND OVERALL HOUSING SUPPLY BOTTOM UP MEETS TOP DOWN “The crisis is not just in housing; it is in our thinking.” Kelvin Campbell, author of Making Massive Small Change

“Why is it that the professions whose sole aim is to improve our towns and cities, have in the eyes of most people achieved quite the opposite? How is it that, with the best of intentions, we have created the worst of all outcomes?” David Rudlin and Shruti Hemani, authors of Climax City

“You never change things by fghting the existing reality. To change something, build a new model that makes the existing model obsolete.” Buckminster Fuller, architect

“We need more homes and that’s a fact. We need volume, light and character. We need liberated rules. We need imagination to unlock forgotten small plots. Shouldn’t we all be developers?” Roger Zogolovitch, architect, developer and founder of Solidspace

“Many men that are homeless are actually veterans. Let’s train these guys up. Let’s empower these guys. In Bristol we’ve got evidence that if you train these individuals that were homeless they now contribute to society.” Claude Hendrickson, co-founder of the Community Self-Build Agency, now a Community-led housing adviser

“I am not interested in self-build because I can’t see how it will help me meet housing need.” A Local Councillor

“If somebody becomes involved in being part of the solution to their problem, they are far more enthusiastic than anybody else”. John Gillespie, Custom and Self-build consultant

“It is a dangerous thing to underestimate human potential and the energy which can be generated when people are given the opportunity to help themselves.” Rod Hackney, architect and former President of RIBA

“We have a home inside us ready to be built if we try. It’s a wonderful kind of confdence to discover that you can provide yourself shelter and offer warm hospitality.” Zach Klein, co-founder of Vimeo and CEO of Dwell

“Bottom-up community-led projects are the most effective force – but they need proper organisation and support from the top. Such projects work best when both ends meet in the middle. Scaling up the entire movement needs to be founded on a desire to build communities of love.” Shannon Ledbetter, Chair of Housing People, Building Communities

“Wenn sich Lieb und Kraft vermählen, lohnt den Menschen Gottergünst” (When love and power unite, humanity earns the favour of the Gods) from Beethoven’s Choral Fantasy, Op.80, frst performed in 1808

3 Contents PRIME MINISTER’S INDEPENDENT REVIEW ON A MAJOR SCALING-UP OF SELF-COMMISSIONED NEW HOMES – THE BACON REVIEW

Greener and House kinder living How putting customers in charge can change everything

Front cover photograph: Justin and Linda Tyers self-built this two-bed home for just £67,000 under Exmoor National Park's afordable housing policy. Te couple kept costs low by taking on much of the design and building work themselves.

Build Cost: £67,000 Build Time: 11 months Location: Somerset

THE PRIME MINISTER’S INDEPENDENT REVIEW TO DEVELOP A PLAN FOR A MAJOR SCALING-UP OF SELF-COMMISSIONED NEW HOMES – ACROSS ALL Photo Credit: Simon Maxwell TENURES – TO BOOST CAPACITY AND OVERALL HOUSING SUPPLY (Architect and Interiors Photographer) Contents

Letter from the Prime Minister 6

Introduction 9

What is Self-Build and Custom Housebuilding? 11

My Recommendations 12 Ensuring the right conditions 17 What people want 29 Raising awareness 35 Using land the public already owns 41 Learning from overseas 49

Delivering real change that works 61

Te Economic Analysis 68

Acknowledgements 106

STREET 10 DOWNING 2AA LONDON SW1A 9 April 2021

THE PRIME MINISTER

increase in housebuilding; and the

Since 2010 there has been a considerable number of homes being built since the lifting of the first period of national coronavirus restrictions continues to rise. But we need to do more, and be more this progress. dynamic, to continue the supply of

Unlike and innovation. The way in which our housebuilding market operates constrains new homes because there is not enough competition housing markets elsewhere in the world, there is a lack of consumer choice and

diversity of supply.

Self-build and custom housebuilding can play a crucial role in increasing choice

for consumers and ensuring people can live in the homes that they want, accessible, and that energy efficient, are designed to meet their needs. homes We know that thatare self and custom builders deliver well-designed high quality, their communities. welcomed by affordable, and

The place for self and custom building has also been amplified for more by people.coronavirus. The in this market the As we build back better and emerge from the pandemic, wethat need help to push drive ahead access to opportunities interventions with expanding delivering policy has begun and Government planners, developers required changes but we needconsumers, to foster landowners, much wider awareness, capacity and among delivery capability and materials. of services among the providers

Working closely with Robert Jenrick MP, theto Housing consumers Secretary, and stakeholders, I would- across like to

you to reach out nationally and internationally

develop a plan for a major scaling up of self-commissioned new homes st capacity and overall housing supply. This should include all tenures - to boo

increasing the availability of serviced plots of land across to England.inform GovernmentThis should be brought together into a report (Terms recommendations of Reference attached) that sets out up and implementable to 10 specific

policy. -2-

this ambition, Coronavirus has highlighted the importance of the placesof self -webuild all in call home. Our are, of the role homes should maximise as Iour know creativity, you our productivity, and the quality of our lives. I am convinced, and as such I look forward to your proposals. I would be grateful if you could by Friday 23 July. report back to me

MP Mr Richard Bacon

TERMS OF REFERENCE

The Terms of Reference for the Report should • Outlining be as follows: the policy progress to date. the growth of the market Ensuring appropriate conditions for policy; have been created and they • A review of fit with wider housing international developed economies, seekingself to-commissioned understand how new the experience of the build successful models in these markets could translate to inward markets investment in and increased activity within the UK robust data for international this should include updat • A route map comparison; ed and on how the different construction sectors and associatedparts of the existing models UK housing to benefit services can revisit market, England from the opportunities their business can support and that exist, • Investigating champion this and how Homes the desire change; of their own in a sustainable within way the and population how this can best be unlocked and to self-commission a realised; home • The role that information and exemplars can play in spreading public knowledge; • Opportunities for more imaginative homes for those serving in the NHS and use other of public public land services, to build the armedmore forces and veterans, as well as helping to deliver housing for the poor, the homeless and the marginalised, including ex-offenders. MHCLG will provide an official secretariat support. MHCLG will maketo provide a small a contactRDEL budget up to £40,000 base in MHCLG and available to provide expert and technical support for the Report via the Right to Build Task Force. You requirement should provide to MHCLG a breakdown by return. of the resourci The Housing Minister will chair a fortnightly steering group with representativesng from HM Treasury and No10 to provide you with appropriate support, including Emma Fraser as Senior Responsible Officer.

7 Photograph: courtesy of www.village-makers.com Introduction

ngland is blessed with some of the most quences are that for decades we have not built beautiful villages, towns and cities in enough houses – and this is tearing deep fis- the world. Our forebears possessed an sures into the fabric of our society. Einstinctive talent for making great places, yet There is a solution. It involves creating the somehow this is an art we have almost entirely conditions in which customers are treated as forgotten. if they matter the most, rather than – for the A gap has opened up between the places most part - scarcely mattering at all. And this we want to see and those we actually create. is what happens when people themselves com- Instead of beauty and a natural order, we see mission the houses they would like to see. a sterile sameness almost everywhere we look. Homes England – whose remit includes Rather than an architecture displaying a rich making markets – has a key role to play in array of local vernaculars we can celebrate kickstarting this market – and my core recom- and honour, crafted using traditional mate- mendation is that a Custom & Self-Build De- rials and skills with a distinct sense of place livery Unit should be established with a man- – and even become a way of affirming identity date to deliver the required changes, staffed by and belonging – we see instead a crushing of skilled professionals with deep experience of imagination, with houses designed by delivering custom and self-build projects for accountants. We are failing to create the listed customers across all tenures. buildings of tomorrow. When we have fully opened up the The consequences are stark. Quite simply, housing market and the planning process to new housing is feared. In no other time in the power of consumer choice, we will see our history would housing be thought of as more great places being developed which pollution. Our country has a growing popu- are warmly welcomed by their communities, lation, an aging housing stock and a younger with beautiful and more spacious houses, at generation who have been priced out of home keener prices – and that are better designed, ownership – and for whom even renting a better built, greener and which cost less to run, home costs far too high a proportion of their which enrich the lives of the people who live income. We need to build more new homes. there – while driving innovation and inward There is of course a proper concern that we investment. And when afterwards we have should protect our beautiful countryside – but done this, we will look back and wonder why opposition to new housing is chiefly a cri de it took us so long. coeur against the second-rate, the environ- I wish to record my enormous gratitude to mentally damaging and the bland. Instead of Chamberlain Walker Economics – a specialist new housing that most people want, we have economics consultancy with a deep knowledge a soulless monoculture. One witness in my of housing, infrastructure and local growth – Review commented that “the planning system for the detailed economic analysis which be- rewards mediocrity” – and people are entirely gins on page 68. A full list of acknowledg- right to object to mediocrity. Yet the conse- ments is on page 106.

9 Bristol has some excellent eco-housing projects which reduced their carbon emissions signifcantly. One of the best is the city’s frst purpose-build co-housing development and the frst project to pilot self-build for rented accommodation, The Courtyard in the Montpellier neighbourhood. The frst project led by Bright Green Futures, it com- prises four rental fats which the tenants designed themselves and some tenants physically helped to build.

The homes are the frst in Bristol to be awarded an A-rating for both energy effciency and environmental impact on their energy certifcate. The project won the second prize of the South West Energy Effciency and Retroft Award 2016 for “Best Large Project” and illustrates how much can be achieved from the grassroots with a few dedicated individuals.

The scheme delivered zero carbon without public subsidy whilst delivering good returns to investors. What is Self-build and Custom housebuilding?

any people are unaware that each a home speculatively in the hope that, at some year in the United Kingdom several point, someone might like it enough to buy it. thousand houses are commissioned “Self-build” is increasingly associated with a Mto order by the customer who will live in the home built on a single plot. By contrast, “cus- house once it is completed. In the UK around tom build” involves homes built by professionals 13,000 houses are built this way annually. Tis on behalf of new homeowners on permissioned makes self and custom housebuilding in the UK serviced plots in line with a framework of rules collectively equivalent in size to one of the larger that defne the nature and delivery of the site. national housebuilders – if it were ranked with Self-build and custom housebuilding is often them it would probably come fourth or ffth. associated with detached homes but has proven Self-commissioned housing is much more com- that it can deliver semi-detached, terraced rows mon overseas, often accounting for a third of of townhouses, conversions of existing buildings total housing supply and, in some cases, such as and even high rise apartment blocks (see page in Germany, it is the dominant method of deliv- 55). Clearly such developments result in some ering new housing (55%). limits to the choices available to occupants. For But what does “self and custom housebuilding” example, an apartment block may fully defne actually mean? Self-build and custom house- the external look of the building and only ofer building are terms commonly used to describe interior layout options and ftting out of a shell a home that is built to the design and specif- to the occupier’s design specifcation. cations of the person who will live there – the Custom build suppliers encourage customer occupant. Self-build and custom housebuilding choice and it is integral to the sales process and are defned within the Self-Build & Custom maximised where possible. Tis is not just about Housebuilding Act 2015 (as amended by the kitchen or bathroom tiles or paint colours but Housing & Planning Act 2016). ofers choices over room layouts, design specif- Many prefer the term “self-commissioned cations and the ability to customise the home to housing” which is clearer. In practice the suit an occupier’s needs. self-commissioned housing market is a spec- Self-commissioned housing can also deliver af- trum. At one extreme, people may fnd a plot fordable housing under a range of tenures, from and undertake every element of the build them- intermediate afordable housing such as discount selves – a home that is literally self-built. At the market sale and First Homes to shared owner- other extreme, people may select a model home ship and even rental properties. from a catalogue and have it erected for them Tis may involve occupiers moving into a on their chosen serviced plot, which they have customisable property which they have fnished purchased from a landowner or builder. What to their design requirements with “sweat equi- both approaches have in common is that it is ty” that is ofset against the cost of a deposit. In the customer who makes the key design and lay- other cases, the occupants may even build the out decisions, rather than a developer building homes themselves.

11 My Recommendations

Recommendation 1: Greater role for Homes England Te Government should create a new Custom and Self-Build Housing Delivery Unit within Homes England to enable the creation of serviced building plots on small and large sites and support the delivery of custom and self-build housing at scale across the country.

Recommendation 2: Raise Awareness of the Right to Build Te Government, working through Homes England in partnership with the custom and self-build industry, should create a custom and self-build housing Show Park and should strengthen existing legislation to mandate the wider publicity of Self-build and Custom Housebuilding Registers and the sharing of key data between willing landowners and people on registers.

Recommendation 3: Support Community-Led Housing, Diversity of Supply and Levelling Up Te Government should reignite the successful Community Housing Fund; create accessible opportunities for communities to help themselves by introducing a Self-Help Housing Programme; and introduce a Plot to Rent Scheme.

Recommendation 4: Promote Greener homes and more use of advanced manufacturing Te Government should recognise and support the pathfnding role of the custom and self-build housing sector in advanced manufacturing and in greener homes to accelerate the delivery of its wider Modern Methods of Construction and Net Zero Housing ambitions.

Recommendation 5: Support Custom and Self-build housebuilding through the Planning Reforms Te Government should ensure that the planning reforms in its White Paper Planning for the future maximise the opportunities for access to permissioned land for CSB across all tenures, including making focussed changes to the Right to Build legislation to ensure that it achieves its objectives.

Recommendation 6: Iron out any tax creases Te Government should investigate the perceived disadvantages in the tax system between the CSB delivery model and other forms of housing, identifying specifc actions where necessary to neutralise them.

12 DETAILED RECOMMENDATIONS landowners and people on registers. To deliver this, the Government would: Recommendation 1: Greater role for Homes England a)With the support of Homes England and in Te Government should create a new Custom and partnership with the CSB industry, establish Self-Build Housing Delivery Unit within Homes a Destination Show Park and Hub with Show England to enable the creation of serviced build- Homes (preferably on public land or with a willing plots on small and large sites and support the ing landowner) which can showcase manufactur- delivery of custom and self-build housing (CSB) ing and assembly capabilities and has meeting at scale across the country. To deliver this, Homes space facilities, designed to sell the Show Homes England would: as part of a new neighbourhood over time and with the ambition to develop further Destination a) Establish a CSB Housing Delivery Unit which Show Parks as the CSB sector grows; would procure and dispose of serviced building b) As part of Recommendation 5(g), mandate plots on public and private land, working with that ‘relevant authorities’ widely promote their SME builders and taking account of market statutory Self-build and Custom Housebuilding demand, underpinned by a clear procurement Registers and that they share demand data and framework and delivery strategy agreed with information on suitable development permissions Ministers, with an ambition to include CSB on between willing people on the register and land- all large sites as part of the housing mix; owners and project promoters; b) Direct investment into CSB enablers, Develop- c) Launch a consumer marketing campaign and as- ment Corporations and Local Authorities and en- sociated website providing public information on: sure strong CSB representation on the new Dynam- • Custom and Self Build Opportunities with links ic Partnership System for public land procurement; to all partners bringing forward serviced plots c) Launch the new Help to Build Equity Loan by for custom and self build on public sector land, September 2021; including opportunities for people to join com- d) Work with the Ministry for Housing, Com- munity-led housing schemes and afordable CSB munities and Local Government and One Public schemes via Community-led Housing Hubs Estate to extend and simplify access to the Brown- • Help to Build Loan Fund with links to partners feld land release fund for the creation of serviced ofering the Help to Build Equity Loan and infor- building plots; mation on the scheme e) Retain access to the Home Building Fund for • Right to Build Registers to explain how Self- CSB projects and ensure the Community Hous- build and Custom Housebuilding registers work ing Fund remains efective and targets the right for individuals and associations of individuals, projects; and with links to all local authority Registers and pub- f) Work with the proposed 'Centre of Excellence' lished performance data for each local authority for Modern Methods of Construction to promote •Show Homes with information on where the efective CSB delivery. public can visit CSB show homes and how to book a visit Recommendation 2: Raise Awareness of the Right to Build Recommendation 3: Support Commu- Te Government, working through Homes En- nity-Led Housing, Diversity of Supply gland in partnership with the custom and self- and Levelling Up build industry, should create a custom and self- Te Government should reignite the successful build housing Show Park and should strengthen Community Housing Fund; create accessible op- existing legislation to mandate the wider publicity portunities for communities to help themselves of Self-build and Custom Housebuilding Regis- by introducing a Self-Help Housing Programme; ters and the sharing of key data between willing and introduce a Plot to Rent Scheme. To deliver

13 this, the Government would: homes to accelerate the delivery of its wider Modern a) Ofer targeted funding to support the growth of Methods of Construction and Net Zero Hous- Community-led Housing Hubs and consolidate ing ambitions. To deliver this, the Government support and responsibility for Community-led would: Housing into the proposed new Homes England Custom and Self-Build Housing Delivery Unit, a) Ensure that CSB is embedded into the work of with a boosted funding model; the new Modern Methods of Construction Task b) Make Community-led housing an integrated Force and its actions and that this work in turn part of the Afordable Homes Programme (AHP) supports the growth of the missing market for with predictable long-term fnance and an am- customisable housing; bition to allocate 10% of annual AHP funding b) Ensure that the momentum towards achieving to empower low income and often marginalised Net Zero house building is sustained by working people to become part of the solution to their own problems, which could include: with the custom and self-build sector to address • Funding local specialist registered providers with the current constraints with regard to increasing a focus on CSB to buy suitable sites and act as the safe use of timber in low rise housing, learning project enablers; and reinforcing the strength and from signifcant progress already made in Scot- success already demonstrated by the Communi- land; ty-led housing Hubs; c) Recognising strong investor interest in Envi- • Creating a Small Sites Programme as a new ronmental and Social Governance (ESG), en- umbrella for the plethora of small and often over- courage innovation and realignment towards use looked sites owned by housing associations, en- of greener building materials, while raising aware- couraging the use of Local Development Orders ness among lenders, valuers, and insurers of the extending over clusters of small sites to eliminate environmental benefts of CSB compared with planning risk, while ensuring that a wide range existing housing stock; of participants have access to the sites, including d) Encourage greener mortgage product design community groups, co-operatives, co-housing groups and individuals. and changes to mortgage afordability calculations • Enabling people to build their own homes using to refect the expected energy costs of a new home ‘sweat equity’, under supervision, while creating rather than the average energy costs for an existing and fostering local opportunities for employment, home, and in doing so support greater initial in- training and enterprise; vestment in greener homes; and • Ofering repayable loan fnance to suitable e)Sponsor and support research and engagement charitable organisations – such as Housing Peo- with organisations such as the Manufacturing ple, Building Communities; Leeds Community Technology Centre and others, to apply more ef- Housing; Wigan Armed Forces HQ; and many fectively the engineering insights and learnings al- similar groups across England; and ready available from the aerospace and automotive c) Introduce a Plot to Rent Scheme with a Rent- sectors to the way in which houses are constructed. Now-Buy-Later option, modelled on international experience. Recommendation 5: Support Custom and Self-build housebuilding through Recommendation 4: Promote Greener the Planning Reforms homes and more use of advanced man- Te Government should ensure that the planning ufacturing reforms in its White Paper Planning for the future Te Government should recognise and support the maximise the opportunities for access to permis- pathfnding role of the custom and self-build housing sioned land for CSB across all tenures, including sector in advanced manufacturing and in greener making focussed changes to the Right to Build legislation to ensure that it achieves its objectives. ria; introduce a clear sanction if the demand on To deliver this, the Government would ensure the registers is not met; and link under-delivery that the forthcoming planning reforms: to the Presumption in Favour of Sustainable De- a) Extend the opportunities for the specifc desig- velopment (or its replacement under the planning nation of land for CSB housing in the proposed reforms); ensure there is an obligatory annual area-based planning system, using Design Codes monitoring requirement placed on authorities; for CSB housing across all appropriate designa- and, clarify how planning obligations can be used tions; to secure CSB development in planning terms, in- b) Set a target for local planning authorities to cluding how plots should be marketed before they provide for serviced plots unless market demand are able to be built out for market housing; (not Register demand) can be shown to be regu- h) Introduce a targeted exception and windfall larly met and there are deliverable allocations in site policy which enables custom and self-build new style local plans to meet this demand; housing on unplanned housing sites in rural areas c) Give substantial weight to CSB as a material and on sites adjacent to existing settlements; and consideration in the revised National Planning i) Introduce a commitment that Government Policy Framework; will publish annual monitoring data of demand d) Facilitate local authorities to take a more in- on Self-build and Custom Housebuilding regis- terventionist approach to bring forward land for ters and delivery against meeting this demand, for CSB and SME home builders by running pilot each relevant authority. programmes to support councils in land assembly to create serviced building plots for new housing Recommendation 6: Iron out as part of the new-style local plan land allocations any tax creases process Te Government should investigate the perceived e) Ensure assembled sites come forward quickly disadvantages in the tax system between the CSB and are deliverable and plan-led, by enabling new- delivery model and other forms of housing, identi- style local plans to be partially amended through fying specifc actions where necessary to neutralise the designation of a Land Assembly Partnership them. To deliver this, the Government would: Zone or Area; embed the learning from the pilot programmes and roll the process out nationally by: a)Engage the Treasury and HM Revenue & Cus- (a) setting out in guidance/policy or a suitable statu- toms to work with the CSB sector to identify any tory instrument the assembly process which should potential imbalances in the tax system which may be followed, similar to Guidance on the compul- disincentivise serviced plots for custom and self- sory purchase process; and (b) provide ongoing fa- build housing; vourable loan funding to service and assemble the b)Consider the actions needed to address any is- sites, which is repaid when plots are sold; sues identifed, with due regard to any fscal im- f) Allow minor changes to new style local plans pact and wider implications of any changes; following a streamlined process, if a development c) Give guidance to Councils to clarify how they on the edge of a settlement/urban area provides can treat the creation and sale of building plots for for small scale CSB plots, and for councils to set VAT purposes; locally-specifc policies for this; d) Recognise that there are unintended chal- g) Make minor changes to the Self-build and lenges in applying the current Community In- Custom Housebuilding Act 2015, where possible frastructure Levy ‘self-build’ exemption to CSB through secondary legislation, to clarify the def- apartments, terraces and semi-detached homes nition of custom and self-build housebuilding; and work with the CSB sector to identify ways what counts towards giving suitable development in which such forms of CSB can beneft from the permissions and how the ‘duty to provide’ is mea- exemption, as part of the Government’s review of sured; remove the use of fees and eligibility crite- developer contributions.

Chapter one Ensuring the right conditions

e face a real threat of Two Nations. Te stakes could not be higher. Te current housing situation threatens Wlabour mobility and the prosperity of the wider economy. It is already a strategic problem afect- ing major employers who want to hire the best staf. It is now causing couples to postpone having children because of worries about how they will ever aford suitable accommodation for a family. It is eroding social capital and could easily foment political unrest and extremism. We are in danger of becoming Two Nations – one nation in which a whole generation struggles to fnd somewhere to aford to live at all, while the other adds to its buy-to-let portfolio. Chil- dren born in the 1980s are the frst since the War to be worse of than their predecessors. As Doug- las Murray writes: “It is not clear why a generation which can’t accumulate capital should have any great love of capitalism. And it isn’t hard to work out why a generation who believe they may never own a home could be attracted to an ideological world view which promises to sort out every ineq-

17 uity not just in their own lives but every inequity Lada and the Skoda. Until, that is, one acknowledg- on earth”i. Te economics commentator Martin es that at the heart of our broken housing market Wolf has broodingly observed that “Once people lies a “Five Year” plan-led system which since 1947 are deprived of hope for a better life for them- has nationalised the control of development land. selves and their children, societies based on consent are likely to founder”ii. And as Nicholas Boys Intellectual failings Smith has recently asked: “Is it surprising that the Te same intellectual failings that ultimately politics of so many of the educated urban young brought down the Iron Curtain have left us with are becoming so fippantly revolutionary? What a system that is deeply inefcient at allocating do they have to lose?”iii land for housing in the places people want to live, or matching supply with demand. And the story Iron Curtain of what happened to Skoda once it was liberated However, almost like a Soviet state, the status quo shows what is possible. Some 75 years after the in housing persists because over many years the decision to nationalise development rights we can population has come to believe that there is no see the result: for the very item on which custom- alternative; they think that – for all the obvious ers spend the largest proportion of their incomes – faws – people must simply learn to live with their homes – they hold the least consumer power. things as they are. Open our eyes and look fur- As a former motoring correspondent of GQ ther afeld and we will see that this does not need magazine – and an instinctive believer in the huge to be the case. Te United Kingdom – and En- benefts of free enterprise and free markets, with gland in particular – operates its housing model an accompanying mindfulness of what John Kay diferently from any other country in the world. has called “their genius, their limits, their follies” We are on the wrong side of our own Iron Curtain. – you will be fully aware that the supply of nearly Until the mass social housebuilding projects of the 20th century, England historically left the delivery of new homes to individual enterprise “Instead of beauty and and private philanthropists, while local authori- a natural order, we see ties installed essential infrastructure such as roads, a sterile sameness almost water and sewerage. In theory, we should have for everywhere we look” the new homes market plenty of competition and innovation, delivering wide choice to consumers with high quality and good value, as happens in everything from Ford Fiestas to Ferraris rises to most other areas of the economy. meet the demand – and that, in a functioning system, it is demand which drives volume, whether Te Five Year Plan for food or shoes or anything else. We all need It might therefore seem ironic that current new food – indeed, one dies without it – yet no one housing often exhibits many of the characteristics has said we need a National Food Service, or a of the old Soviet-style plan-led economies – fa- National Shoe Service for that matter. mously characterised by scarcity, low quality, ho- Rationing the means of production within an mogeneity and a lack of innovation – in motoring otherwise free market has led to the virtual mo- terms, the housing equivalents of the Trabant, the nopolisation of those means, and the result is a system in which big housebuilders chiefy compete the planning system. Te government has noted not in the market for new homes but in the market the plight of smaller building frms and has taken for land. I discuss this important phenomenon in steps to bolster their position and ofer new sourc- greater detail in Chapter Six. Land rationing has es of funding, such as the Home Building Fund. infated prices, suppressed the size of new homes Nonetheless, the position for smaller builders re- and gardens, blunted innovation and constrained mains a difcult one – and some even told this output. Moreover, this has become hard-wired into Review that if they were starting out in business the system. Apparently, we are just supposed to ac- now, they would not start. cept that land comes forward almost exclusively as But it is no use blaming the big housebuilders. large strategic sites. And we are also just supposed Mere exhortations that these private businesses to accept, apparently, that individuals, communi- must “do their duty” by building more houses, ties and small builders wishing to build homes – as more quickly, are intellectually woolly and will they have done for centuries – simply cannot access fall on deaf ears. As major companies they are the land market. To be clear, I am not arguing for already doing their duty – their fduciary duty an Austrian or Chicago School free-for-all. Tere to their shareholders – and the fact that these would be very little support for that. Indeed, we companies have vastly reduced in number while need muscular State action to correct the mistakes of the past, but in a diferent way. It is popular to lay the blame at the door of “Big housebuilders chiefy the volume housebuilders, with their landbanks, compete not in the market super-normal profts and bland output, but this for new homes but in the uniquely British model has evolved as a natural re- market for land” sponse to a system that controls the means of production. A decision made at the height of post-war idealism, but now discredited in almost every other growing hugely in size – and that the SME Build- part of the economy, still prevails at the heart of er sector has nearly been destroyed – is a direct one of the most fundamental and important indus- consequence of a regulatory environment which tries in England, a system which – in a very un-En- is both exceptionally complex and fraught with glish way – bestows permissions in lieu of rights. risk, so that the gaining of planning consents requires both very deep pockets and the ability Smaller building frms to bear signifcant risks over very long periods of As recently as the 1980s, small and medium sized time. Te concentration of most housebuilding housebuilders built two thirds of all houses. Tese into fewer and fewer hands is simply an evolu- smaller players – who successfully met local de- tionary response by housebuilders to the regula- mand and who, crucially, depended on their local tory environment in which they are required to reputation for future sales – now deliver barely operate. And to change the course of evolution, 12% of new housing stock. Smaller builders were one must change the conditions. extremely hard hit by the fnancial crash and have Te structural weaknesses in our system are not largely been squeezed out by very big companies for lack of ink on paper – or of talk. In a seem- who can aford the time and cost involved in ne- ingly endless cycle of consultations about consul- gotiating a path through the complex thickets of tations, we ask almost everyone for their views

19 on housing: councillors, planners, landowners, faster and safer, our life expectancy is certainly a housebuilders, local residents who already have lot longer. And yet there is one huge diference a home, electricity suppliers, water undertakers, between our generation and the millennials out builders' merchants, campaigners for rural En- there. One cardinal way in which opportunity has gland, and many more. declined. And that is in the scope and power of the younger generation, with their own resources, Customers to buy somewhere to live that they can call their Oddly, the one group we don’t seem to listen to own. It is a disgraceful fact that we now have are the people who need somewhere to live. In lower rates of owner occupation – for under 40s other walks of life we call these people customers – than the French or the Germans. Tat refects – and listening to customers works quite well in the failure of governments for the last 30 years to most areas of life we care about. An important build enough housing”. point is that “Customer” should mean anyone True words. Indeed, your words, in a speech you who needs somewhere to live. Tis includes ordi- gave on 2 October 2018. It is now very clear that nary people on normal incomes who want to own new approaches are needed. In a quest for mere their own home – and who are currently watching numbers – and those often no more than fgures in a a natural aspiration turn into a distant and impos- theoretical plan, not real houses – we have forgotten sible dream – as well as those who currently can’t about people, about their hopes and dreams, their even dream of home ownership at all because they astonishing creativity and their need to belong. If we are simply desperate for a decent home of any are to build more houses in England – and we very kind, including the poor, the marginalised, the much need to – then we have to do things diferently. homeless and ex-ofenders. All are customers of Te government observed in its 2017 white paper the housing system in the simple sense that they that the housing shortage isn’t a looming crisis, a dis- all need somewhere to live – and if they all had tant threat that will become a problem if we fail to act; some customer power, we could change things we are already living in it. Tat white paper also not- much more quickly. ed that this is “a problem that won’t solve itself.” And while there has been progress in housebuilding recent- “Low quality, scarcity, ly, the greatest advances have been in our thinking.

homogeneity and a lack of Beauty innovation were features of Te landmark report Living with Beauty – pub- Soviet Five Year Plans, just lished last year by the Building Beautiful, Build- like our new housing” ing Better Commission – set a very helpful new tone. Te Commission cited Dame Fiona Reyn- olds: “Today to talk of beauty in policy circles We need to put customers and their choices risks embarrassment: it is felt to be too vague a back at the heart of the process, where they be- word, lacking precision and focus….yet in los- long:- “In some respects we have more choice than ing the word ‘beauty’ we have lost something you can shake a stick at. We can watch anything special from our ability to shape our present and anywhere any time. We can zoom of to AirBNBs our future”. People now increasingly understand on cheapo fights. Our food is better, our cars are that – far from being embarrassing – beauty is an essential lens through which to see our housing buildings. It is used to deliver afordable housing problems if we wish to solve them. Put shortly, including both afordable home ownership and if we want “development” to be a good word, we afordable rent. It is used by community groups must have good development. and mutual housing co-operatives. Tese homes are built within frameworks that are able to bal- Wisdom ance consumer choices with wider community Te old wisdom of how to do things well is slowly needs. Tese are homes that can look the same being recovered. Ancient civilisations across the on the outside but be very diferent on the in- world with no connection to one another solved side with regards to design and use of space. Self- the problems of producing liveable human settle- build homes range from ultra-modern methods of ments in very similar ways, as the urban thinkers construction built in high-tech of-site factories David Rudlin and Shruti Hemani have pointed through to bespoke artisan homes which are con- out. Architectural designers such as Charlie Lux- structed in local materials by local craftsmen. ton and social entrepreneurs such as Nicholas Tere will be a greater appetite for new homes Boys Smith – a co-author of Living with Beauty – if more people wish to live in them. Over half of SME builders in England have built a self-commissioned home in the last year. Tese homes One witness in my are better built, greener, longer lasting, and more Review commented that beautiful than the products of the largest house- “the planning system builders. Te benefts of home ownership have rewards mediocrity” been long recognised and actively encouraged. It is indisputably true that these benefts are maximised when homeowners have homes that are have shown us that asking people what they actu- best suited to their own needs. And people’s needs ally want and involving them in decisions delivers are defned not just by the number of bedrooms very diferent outcomes, with much better public but by many other things too: their physical and space and much better places – real places with mental needs, their values, lifestyles and tastes, by middles. Te Duchy of Cornwall has shown that the need to be able to work at home – so clearly creating homes for a wide range of people – with amplifed by the recent pandemic – and by care mixed incomes and mixed tenures in walkable for their family, their community and their con- places – leads to new jobs and transforms how cern for the planet. Yet we have failed to follow human beings live. Nicholas Boys Smith rightly the path to its natural conclusion at the point concludes that we should spend less time asking at which we have the greatest opportunity to do how to build more houses and more time think- so – that is, when the home is built. Our diverse ing about how to make houses more popular. population is being failed by a speculative house- Evidence from across the world shows that building model focused on delivering the small- self-commissioning of homes is the norm for est number of diferent home types to the largest homes of all types and tenures. It is used to de- groups. liver high rise developments, terraces, squares and More peopleiv want to build their own homes foating homes, as well as detached houses. It is than to buy new onesv but they face a system used in the renovation and conversion of existing which is heavily stacked against them – not least

21 the availability of land and fnance and also the Pandemic hostility of some planning authorities who pre- As you indicate in your letter to me, the corona- fer dealing with a small number of large national virus pandemic has highlighted the importance housebuilders. Just 2% of the public trust devel- of the place we call home. Indeed, the combined opers and only 7% of the public trust local author- efects of the pandemic and over 20 years of us- itiesvi when it comes to large-scale development ing the internet to work remotely have thrown but we seem to place more trust in a planner’s tick up enormous questions about the nature of box sheet that in homeowners’ own judgements. Place and Work and Real Estate. As recently as Tere is a missing market. the 1980s, a shiny new retail shopping centre or a new commercial ofce block looked like good Power investments. Not now. And when the John Lewis A signifcant part of the solution is to deliver a Partnership announces – as it recently did – that shift in power from planners and providers to it plans to build 10,000 homes, one knows that home occupiers – whatever their tenure. Change the tectonic plates are starting to shift around. Yet is delivered through a shift towards the self-com- this turbulence also gives us huge opportunities to missioning of homes – what we call Custom and reimagine and to repurpose the places around us. Self-Build – or CSB. Te simplest, quickest and Churchill famously said “We shape our buildings cheapest way to do this – although of course it is and thereafter they shape us”. We now have an not the only wayvii – is through muscular action unparalleled opportunity to reimagine our built by the State on public land to provide serviced environment in ways which will help us shape our plots of land everywhere so that people can have futures together. real choice. And the good news is that change has Governments alone cannot solve these prob- successfully happened elsewhere. Tis does not lems. Indeed, it would be a form of lunacy to need to be any more complicated than ordering imagine that this can be done from the top down a new car, where customers expect and get a high – without widespread and genuine participation by ordinary people. But as Kelvin Campbell pro- “We need permissioned poses, by changing our thinking, practices and language we can create space where governments and serviced plots of land and people can work together to achieve a trans- available everywhere formation that neither could achieve alone. to allow consumers to Interestingly, at the same time, fund managers make real choices” are now thinking harder than ever about how to invest in residential dwellings of all types and tenures at a scale which makes sense for them – so we level of personal specifcation. Te Netherlands is may see a world emerging where the transforma- now delivering 15,000 homes per year in this way. tion is guided by the people and their government If we were achieving at the same rate as Te Neth- working together, with much of the money to pay erlands, the UK would – given our larger size – be for the changes coming from pension funds look- delivering 60,000 houses per year in addition to ing for safe very long-term investments. existing new housing stock. In accordance with my terms of reference, the format of this report is as follows: frst the report many, particularly for smaller builders and indi- looks at the story of custom and self-build so far viduals. If we genuinely want to see a solution to and the nature of government support in recent England’s housing problems, then we must remove years. Ten the report examines the desire within the risks around infrastructure – a proper public function – and create certainty around planning so that the system is predictable – as should hap- “One knows the tectonic pen anyway in a rule-based system. We need per- plates are shifting when missioned and serviced plots of land to be readily John Lewis Partnership available everywhere and then to allow consumers announces plans to build to make real choices. Moreover, there is clear evidence that consumers with free choices commis- 10,000 new homes” sion much greener houses with lower running costs. Increasing consumer choice will therefore assist the government in meeting its climate change commit- our population to commission their own homes. ments, which will not be met without signifcant After this, the report looks at how information changes to how we build houses. and exemplars may be used to help raise awareness. Ten we see what might be done using land the Custom & Self-Build Delivery Unit public already owns. We also examine what can Homes England – whose remit includes making be learned from overseas. And fnally, the report markets – has a key role to play in kickstarting charts a path to delivering real change that works. this market – and my core recommendation is Te central problem we face is that too few peo- that a Custom & Self-Build Delivery Unit should ple wish to buy the new homes that are being built. be established with a mandate to deliver the re- Our housing delivery system has become increas- quired changes, stafed by a small team of skilled ingly hard-wired in favour of one particular model professionals who have wide experience of deliver- of limited appeal. Ready access to permissioned ing custom and self-build projects for customers, and serviced land for those ofering real customer and reporting directly to Homes England’s chief choice is at the heart of the solution. Delivering executive and chief investment ofcer. genuine consumer choice is economically viable I wish to record my enormous gratitude to and delivers better outcomes – just look at what Chamberlain Walker Economics – a specialist happens elsewhere in the developed world and economics consultancy with a deep knowledge of indeed in the car market. But ofering real choice housing, infrastructure and local growth – for the won’t just happen if it remains very difcult to do. detailed economic analysis which begins on page Indeed, the government acknowledges that our 68. A full list of acknowledgments is on page 106. housing crisis is “a problem that won’t solve itself.” I believe that answers are now within our grasp to Te two biggest risks facing those who wish to the fundamental questions of how to create great build a house are the very signifcant infrastructure new places that are welcomed their communities risk – someone has to put in the roads, water and rather than feared. And at the heart of any suc- other service such as electricity and broadband – cessful new approach one thing stands out. Talk and the planning risk – which is unendurable for to the end users – the customers.

For footnotes to Chapter one, Ensuring the right conditions, see page 104

23 Custom & Self Build the Story So Far

Since 2011, the Government has introduced sev- into effect in February 2014. eral progressive measures to boost the self-build The Government then announced that it would and custom housebuilding sector (CSB), focussing consult on a new Right to Build scheme in the on overcoming key barriers relating to land, f- March 2014 Budget to give prospective custom nance and bridging the knowledge gap on effec- housebuilders a right to secure a serviced plot of tive delivery. These included legislation, planning land from their local council. This was followed by policy and guidance to bring forward more land; a £30m Custom Build Homes Fund in July 2014 fnancial support for self-builders, councils, land- to provide short-term loan fnance for multi-home owners, builders and building groups; a vanguard custom-build projects. In September 2014 the programme of supportive councils and pilot proj- Government announced eleven ‘Vanguard’ local ects on public land; support through an indus- authorities to pioneer the Right to Build. try-led Task Force; and, promoting development In March 2015 the Minister of State for Housing quality. and Planning wrote to all local authorities under- In January 2011, as part of its plans to increase lining the Government’s commitment to support housebuilding, the Government asked the self- self-commissioned housing to diversify housing build industry to work with the Department of supply and help deliver the homes people want. Communities and Local Government to consider This made clear that failure to take local demand what was needed to help more ordinary people for CSB into account could lead to Local Plans be- in England to build their own homes. In July 2011, ing found unsound by the Planning Inspectorate. the Self-Build Government-Industry Working In June 2015 it opened a £150m Custom Build Group published, ‘An Action Plan to Promote the Serviced Plots Fund Loan which superseded the Growth of Self-Build Housing’, which set out a vi- Custom Build Homes Fund and was designed to sion statement for the CSB sector with 29 specifc provide loans to create 10,000 serviced building actions to create a ‘self-build revolution’. These plots for self-builders. actions informed the Government’s November This was followed by landmark primary legis- 2011 Housing Strategy, ‘Laying the Foundations: A lation in March 2015 under the ‘Self-build and Housing Strategy for England’, which set out plans Custom Housebuilding Act’ which placed a two- to make self-commissioned homebuilding a main- fold duty on relevant authorities (broadly local stream housing option and help build affordable, councils and national parks) to maintain a register greener and innovatively designed homes. The of people who are seeking to acquire a serviced Housing Strategy set an aspiration to unlock the plot in their area to build their own home and to growth potential of the custom homes market and have regard to the demand for custom build hous- double its size, to create up to 100,000 addition- ing as evidenced by the registers when exercising al custom-build homes over the next decade and certain functions including those relating to plan- enable the industry to support up to 50,000 jobs. ning and housing. In line with the Housing Strategy, the Government In May 2016 this important legislation was published its frst National Planning Policy Frame- strengthened by the ‘Housing and Planning Act work (NPPF) in March 2012 asking all local plan- 2016’ which established a legal duty on local au- ning authorities to assess the local needs of those thorities to give suffcient development permis- that want to build their own home and plan to sions to meet the demand on their Register on a meet these needs through local plans and plan- rolling basis, supported by two sets of regulations. ning decisions. This action was followed by leg- In October 2016 Homes England launched a £3bn islative changes to exempt self-builders from the Home Building Fund to support the Small and Community Infrastructure Levy (CIL), which came Medium-Sized Enterprises (SME) developer market and landowners who deliver serviced plots for for CSB and announcing a review of the Right to custom and self-builders with loan funding for de- Build legislation. In the November 2020 Spend- velopment and infrastructure costs. ing Review, the Government then announced the In January 2017, the Government announced creation of a Help to Build scheme, which – when that 14 new garden villages would have access to launched during 2021 – will support more people a £6m fund over two fnancial years to support to build sustainable and more beautiful homes the delivery, some of which included self-build with an equity loan similar to Help to Buy. and custom housebuilding ambitions. In Febru- In January 2021, the Government published ary 2017, the Government published its Housing a draft National Model Design Code, which rec- White Paper, ‘Fixing Our Broken Housing Market’, ognised the importance of CSB as part of the which acknowledged that there was signifcant housing mix on larger sites. This was followed demand for self-build and custom housebuilding by revised planning practice guidance in Febru- and that made clear that custom-build housing is ary 2021, which included a range of clarifcations an important part of the Government’s housing and advice, including acknowledgment that CSB diversifcation plans. It set out further actions to embraces a spectrum of projects which have a support the sector, including work with lenders range of benefts. In April 2021, the Government and supporting custom-build through its Acceler- published a ‘Self and Custom-Build Action Plan’ ated Construction Programme. It also welcomed which set out further plans to support the CSB the establishment of the Right to Build Task Force sector, including a legislation review; a dedicated by the National Custom and Self-Build Association £25m Brownfeld Land Release Fund to support (NaCSBA), which it supported with a secondment, local authorities bring forward serviced plots for and commitment to a possible legislative review CSB on public sector land; and, commissioning of if local authorities fail to take suffcient action. the Bacon Review. £95,850 of New Burdens funding was then paid I believe that the steps which the Government to local authorities between 2016/7 and 2019/20, have taken since 2011 have been progressive and totalling £32.2m, to support them in exercising helpful to integrate CSB housing as an important their duties under the legislation. part of our housing market in public policy terms The NPPF was revised in July 2018 which con- and begin to address some of the main barriers solidated and strengthened government planning holding back the growth potential of this import- policy for CSB. The Government then published ant sector in support of diversifying our broken the National Design Guide in October 2019, high- housing market. However, my analysis has reaf- lighting the Government’s priorities for well-de- frmed by strong view that they have not yet had signed places, explicitly referencing CSB. the desired effect to create a ‘self-build revolution’ In August 2020, the Government published its or delivered on the Government’s aspiration in the planning White Paper, ‘Planning for the Future’, 2011 Housing Strategy to double the size of the which included proposals to support the CSB sec- CSB sector by 2021 and bring it within reach of tor, including allowing local authorities to iden- ordinary people. tify land for CSB homes, exploring how publicly owned land disposal can support the self-build On the next page there is a timeline which shows sector, and maintaining the exemption from the government support for Custom and Self-Build CIL. This was followed by a letter to all local au- over the last ten years. thorities in October 2020 by the Secretary of State for Housing, Communities and Local Government further underlining the Government’s support

25 Custom & Self Build Timeline of Government support 27 opener image here Chapter two What people want

ustomer choice is an important part of most aspects of how we as consumers determine what we buy. Choice is typi- Ccally seen as positive – a driver of quality and value. Yet within the new homes market in England, choice is substantially constrained. Despite homes being by far the biggest item of household expenditure, we appear to have become institutionalised into a sullen acceptance that there is limited consumer choice homes. With thinking that is more akin to a Soviet-style economy than a market economy, we appear to have concluded – perhaps rather grudgingly – that the choice and quality of new homes is low and that the cost is high. Te housing market appears unique in this regard. Research by the Home Builders’ Federation – the trade body for big housebuilders – indicates that only 33% of people would consider buying a new-build homei, while a Homeowner Survey by HomeOwners Alliance and BLP Insurance found that the British public are shunning new homes because they are seen by some as being poorly built, characterless and with too small rooms.

29 Participants in the survey said things like: “New Broken Housing Market stated: “Te way in which houses are rabbit hutches thrown up….with small the market operates constrains the supply of new rooms, small gardens, thin walls, dubious build homes because there is insufcient competition and quality”. According to the survey conducted by innovation”. Te Independent Review on Build YouGov, only one in fve (21%) would prefer to Out found demand for Custom & Self-Build to buy a newly built home ii. be additional. As in all markets, greater customer My view is that the startling lack of widespread choice creates greater overall demand. Tis is im- desire for new-build homes is directly linked to the portant not just for delivering more homes. Greater lack of serious choice and variety in the homes that choice means more people aspiring to live in those are built. new homes and therefore a greater acceptance of their being built. Te desire in the population to In this section I seek to set out “what people self-commission a home want” and in particular “how many people want England has by some distance the lowest known it”. Tis is set against a greater backdrop of chang- rate of self-commissioned homes in the developed es in the ways we live and work, and manage our world. Te question is whether this refects a fun- lives, which have been brought acute focus by the damental diference in demand or in supply. Do Covid-19 pandemic – so that people are thinking we not as a nation seek a home built to our de- much harder about where and how to live – and sign and specifcation in the way that home buy- how to fnd a home that meets their needs. At the ers in other countries do? Are our needs met by same time, Modern Methods of Construction – our existing stock of homes (amongst the oldest in and, in particular, the greater use of timber – are the world) and by the speculative new build mar- facilitating greater choice. ket, in ways that are not the case anywhere else? Tis section is complemented by the Econom- And would demand for new homes with a greater ic Analysis starting on page 69 that provides the degree of customisation be additional or substitu- evidence underpinning the demand for new homes tional? What impact would growing the Custom & in more detail. Self-Build market have on demand for speculatively-built new homes? International Demand Tese questions have already largely been an- Te fact that England is such an outlier when it comes swered. Te government’s white paper Fixing our to an international comparison of self-commis-

Source: National Custom & Self-Build Association (NaCSBA) sioned homes presents a strong assumption towards an unmet latent demand. On average 40% of new Local Demand homes in developed nations are self-commissioned. Since 2012 the National Planning Policy Frame- Tis includes densely populated nations such as Bel- work has required local authorities to plan for the gium and Japan. Tis would imply 120,000 homes housing need of the custom and self-build sector. out of the government’s annual 300,000 target com- Tis should have created a strong evidence base for pared to the current estimate (across the whole of the local demand across England. In practice, robust UK) of nearer 13,000 per year. analysis at strategic planning stage is rare, with a subsequent consequence on the number of plots National Demand included within the strategic planning targets. Te most recent general population surveys indicate Medium term demand is available from the that around one in three of us would like to self- Right to Build Registers that each local authority commission a home one day iii. Tis is similar to has been legally obliged to maintain since 1 April the numbers who would consider buying a specula- 2016. Tese Registers show a level of demand tively built new home. Tis limited demand for the that is consistently below the level of international product that the market currently delivers has many delivery or that from consumer surveys. Tis gap reasons. An inevitable consequence however is that can be explained in part because only 13% of the new homes market is underserved. Tere are many population are aware of the Self-Build Registers in- who for reasons of faith, value, lifestyle, sustainabil- cluding over half of self-builders. Only one in six ity, disability or tastes are excluded from the limit- self-builders identifed as having joined a register. ed choices available that are focused on the largest Te Registers themselves are therefore incom- customer segments. plete records of demand. Furthermore, both MH- Desire to self-commission is strongest amongst the CLG and NaCSBA analysis shows a signifcant young and decreases with age. Tis is very diferent volume of records are removed from Registers each from the current profle of those undertaking a self year, or moved within Registers such that the duties or custom build where typical self-builders are in on the authority are reduced. In addition, it has their 50s. become increasingly difcult to join the Register When those currently planning a self-build were in the area where you would like to live. Te most asked what they would do if unable to proceed recent NaCSBA survey identifed 32% of planning with their plans, intentions are almost completely authorities imposing constraints to those seeking divided between buying an existing home (48%) to join the key Part 1 of the Registers including and staying put (46%). Only 6% would consider substantial and unjustifable fees and the require- a speculative new build. ment for a mortgage ofer to be in place. For many of those currently looking to self-commission a home, their ideal option is a detached Where and what types of individual house, potentially as part of a small- homes are wanted er development. Demand for terraced homes or A survey of customers actively exploring the possi- apartments is limited amongst this current group, bility of self or custom building noted: in part because such options are rarely ofered in • 47% of people don’t mind whether they build the open market (although they do frequently fea- their home on a single plot or alongside other new ture in Community-led housing). build homes

31 • 48% of people would like to build a bespoke signifcant interest can be found from the data- home built by contractors/builders bases of those in the custom and self build sector. • 21% would like to build a customisable home Tese include the specialist magazines and their • 31% would prefer to build or manage the associated plot search oferings (Plotfnder project themselves (versus using a main contractor) and PlotBrowser); the National Self Build & Renovation Centre; and BuildStore / Custom Under National Planning Policy Guidance Build Homes. Databases individually (and there- NPPG, local authorities are advised to pub- fore collectively) signifcantly exceed current supply. lish: “preferred locations in a local area, plot sizes In most cases these databases refer to a particular and type of housing intended to be built, where part of the Custom and Self-Build homes market this information has been requested by the – that of individually designed and built homes. authority and provided by an applicant.”iv At the Tis highlights further gaps in the demand data. same time “Relevant authorities should use pref- Members of the public have become condi- erences expressed by those on the register to guide tioned to a single model of new homes delivery, the their decisions when looking at how to meet the speculative development market, but it is a model duty to grant planning permission etc. Tis will that most people choose not to engage in. At the help ensure that relevant authorities permission same time, most people have never met anyone land suitable for self-build and custom housebuild- who has self-commissioned a home and certainly ing which people are actually keen to develop.” In have not had routine access to opportunities to practice most report nothing. follow this route at the time they were consider- One council that does have a large Register and ing their next home – and this for a housing op- produces a report is Cornwall. Its report is consis- tion that is a mainstream choice in the rest of the tent in showing amongst other statistics a distribu- developed world. tion towards three-bedroom homes. Customer choice does not only apply to individual open market housing. In Europe, Other Measure of demand afordable housing is frequently delivered through and Wider Challenges a group commissioning approach. Outside the Registers themselves, evidence of In our nation we have currently over 900 Community Led Housing groups operating. A practice it is supply rather than demand that is research report v commissioned by the National likely to be the limiting factor, the greatest single Community Land Trust Network in partnership challenge being land that is both permissioned with the Confederation of Co-operative Hous- and accessible. ing, Locality and UK Cohousing found that the In the short term, the easiest way to unlock and potential pipeline of Community Led Housing realise demand is to increase access in areas where is signifcant, totalling over 23,000 across un- demand is already strong and there is capacity to specifed and specifed development stages. Even supply. Right now, this is individually-designed discounting units for which the stage of homes delivered by SME builders in small de- development is unknown, over 10,000 units are velopments around the edges of settlements and planned. Tis mirrors evidence from Homes shell apartments in larger urban centres. England which suggests there are over 10,500 In the longer term, growth is likely to be in the homes in “live applications” to the Community custom-build sector with sites ofered alongside Housing Fund. larger developments. Tis route ofers a wider and more afordable option. Tis greater scale Bridging the Gap requires a greater level of investment – and new Customer choice is essential to optimise the awareness from the public – in what is in efect a delivery of new homes in England. In the long- missing market. term, international evidence suggests that the market could and should be delivering around 120,000 of the government’s 300,000 target for new homes each year. Whilst much of this demand is latent, there is plentiful evidence that demand is in excess of current supply. Delivery at this scale requires changes across all aspects of our housing market, from customer awareness and access, through land supply and suppliers and manufacturers. In

i https://www.hbf.co.uk/documents/6698/Why_buy_new-_Home_buyer_intentions_and_opinions_-NHW16_ FINAL.pdf ii https://hoa.org.uk/2015/06/new-homes-standards-are-slipping/ iii One survey by Nationwide Building Society put the proportion higher at 53%. Another more recent Nation- wide survey found a still higher proportion at 61%, which potential demand even higher among the young. iv NPPG Paragraph: 012 Reference ID: 57-012-20210508 v http://www.communitylandtrusts.org.uk/_flecache/387/a2e/905-clh-pipeline-analisys-dr-tom-archer-feb-2020.pdf

Chapter three Raising awareness

he self-commissioning of a home is a normal part of the market in most developed nations. Given that this approach to Thousing is integral to all stages of the housebuilding process – and also to the house buying process – information and exemplars are readily available in most other countries, through established and trusted businesses operating at scale. Put simply, custom and self-build is as natural a route to take as purchasing a speculatively-built house and the market has evolved to meet the needs of those wishing to pursue this approach. Specu- latively-built housing remains an option and many providers works in both markets, with a choice of a new home – completed with standardised fnishes and ready to move into – or a customised new home built to order and ready to move into within a few months or sometimes just weeks. For many in these countries, information is readily available and examples and exemplars can be found amongst their family, friends, and peers. Te markets also facilitate choice and there are broadly four models available for making plots and or homes available in the market, as follows:

35 1.Collective Show Parks and Websites 2. Individual customer-focused Te German new-built market ofers diverse choices oferings both in terms of physical sites and on-line platforms. In Sweden houses can also be purchased online or through showrooms and through access to exist- Musterhaus.net ing homes (with the active support of the home- Musterhaus in Germany terms itself “the House owners). Tis model is more distributed and less Building Portal”. Its website lists more than capitally intense and it also refects in part a much 2,400 homes from 350 diferent construction lower population and population density. companiesi. Musterhaus provides a search facility Trivselhus is a Swedish housebuilder. It is akin to renting a holiday property and also has already operating in the UK and built the a customer-friendly focus through its Facebook award-winning Marmalade Lane co-housing page. Tis has over 100,000 followers and a simi- development in Cambridge. However, its lar number of likesii. Swedish consumer ofering is much more In addition, the company lists 35 Show Parks advanced than that which is available in the UK. throughout Germanyiii. Te largest Show Park is In Sweden it sells its product through a range of at Bad Vilbel near Frankfurt. It is well connected outlets. As in Germany, its houses can be viewed to the motorway network and has over 60 show and even ordered on-line. It also operates a range homes, attracting 103,000 visitors last year. of showrooms across Sweden. It has worked Te sites are “Destinations” which promote hard to ensure that its own customers promote family visits, with a range of facilities and park- its products through ofering physical and virtual ing. Tere is a small charge for entry that can guided tours underpinned by a message of safely often be ofset. In all there are over 1,000 Show and ease. Houses throughout Germanyiv. Whilst there is huge choice, not all buildings are available in all 3. Show homes and developer-led sites locations. Te focus is typically on detached Australia has a well-established custom build homes. market where a single developer purchases a plot Homes on the site typically are there for 10 to of land, builds a show house and then ofers ser- 15 years before being dismantled and replaced. vices for a bespoke plot on its own site. In some Other sites are in residential areas. Tese are cases the site may be shared and more delivery temporary installations secured through planning options are available. conditions and remain operational between 10-20 It is normal for residential developers to create years, after which the homes are sold to buyers. masterplanned communities with a wide range Te largest currently known park in Europe is of housing types, including narrow urban lots, the 7.4 hectare Blaue Lagunev complex near Vi- medium density dwellings and apartments as enna and has some 100 homes from 25 provid- well as single detached houses. Customers are ers. It had some 140,000 visitors during 2019, typically ofered toolkits and expert advice, with refecting the popularity of custom and self-build a choice to commission a home or to buy brand in Austria where some 33% of all detached and new, together with fnance packages. Te cus- semi-detached homes are currently prefabricated tomer is treated as if she is at the centre of the and customisedvi. developer’s concerns. The Show Park concept

FertighausWelt Cologne • Payment of a 10,000 Euro penalty if a home is not FertighausWelt Cologne is one of several show parks completed on time for the park opening; run by the Federation of German Off Site Housing Manufacturers (BDF). • A 10 year initial contract to exhibit with the show home park owners. Contracts roll over for an addi- Some 24 different off-site housing manufacturers tional fve years if exhibitors do not cancel; are represented, including several frms working in the UK market such as Kampa, Stommel Haus, Weber • Payment of a management and servicing fee of Haus, Danhaus, Hanse Haus, Huf Haus and Bau-Fritz. 250 Euro annually;

Location • Attendance of sales staff for each manufacturer The park is located on the edge of a business park during opening hours, or the manufacturer incurs along the A4 motorway. It is anchored by a visitor penalties; centre with 85 free car parking spaces, leading to a pedestrian zone aligned with serviced plots ranging • Complying with fair trading rules. For example, between 300-550 square metres, where home man- sales agents cannot collect clients from other hous- ufacturers pay an annual ground rent to the show es or tout for business in the pedestrian zone; home park owners to exhibit their homes. • Complying with rules and limitations relating to Visitors pay a small fee use of advertising to ensure a pleasant environment The exhibition is open 11:00 - 18:00 from Wednes- is provided for visitors. day to Sunday. Visitors pay a small entrance fee (up to 6 for a family), which is valid for a second visit. A popular destination Entrance is free to visitors with an exhibitor appoint- In order to remain cutting edge, homes are typically re- ment or to attend a visitor centre meeting. placed or renewed on an 8-15 year cycle. Company representatives say that the park is a popular destination To exbibit, home manufacturers must comply with a for buyers and as a broad guide each exhibitor sells range of rules, including: 30-50 homes a year through this sort of marketing.

• The requirement to obtain planning permission Working from home from the local council in accordance with the park’s Show Parks have become increasingly popular during design code (equivalent to a local development or- the Covid pandemic because more people are looking der which grants outline permission); to build their own homes and work from home.

37 4. Local Government-led Plot Shops Current position – England In the Netherlands, the market has a substan- Overview tial element of individually designed homes. In Te UK self-build market is currently largely many cases for urban developments these are fa- made up of architect-designed individual homes, cilitated by the sale of plots by the local author- located on individual plots and distributed across ity. Plots Shops facilitate the sale of plots and the country. help link self-builders with available plots. Te Television shows including Grand Designs Dutch system typically supports a varied commu- attract audiences in the millions. In normal nity through allowing sites to be sub-divided into pre-pandemic times there was a very good spread plots of diferent sizes to refect diferent budgets. of self-build and home improvement exhibitions Until the global fnancial crisis the Netherland across the country, with six fgure attendances new build market was similar to the UK, domi- annually. Such exhibitions feature home builders nated by speculative development. However, the but, due to the diverse nature of the sector, the Dutch response focused less on supporting large bulk of activity is around window systems and speculative housebuilders and more on facilitat- doors, heating systems, renewables and products ing individuals to self-build. Almere is a new relevant to the wider home improvement market. town development on reclaimed land whilst Buik- Outside the exhibitions, there are few oppor- slotherham is an urban regeneration area. Both tunities to obtain direct access to the sector and exhibit a wider variety of self-builds with a focus its ofering in the ways that are common in other towards individually designed homes and apart- countries. Tere are individual pockets of oppor- ments rather than the model home approach in tunity for individuals to see for themselves the Germany and Sweden. Te relatively high densi- options that may be available, but these fall well ty of Te Netherlands means that terraces, squares short of a developed market (see map opposite). and apartments are common forms of development and fne examples can be readily identifed Raising awareness and viewed within most urban areas. For customers who are unused to a self-com- Te large scale of Almere means that it has been missioning model, as is the case in England, it is able to zone its development. Tis has resulted in important that they are given the opportunity to variety determined by size and design, amongst see the possible product for themselves. Some other factors. Some zones for example are specif- providers have followed this option but they are cally allocated to “homes of architectural interest”. few and far between and are distributed across the Te site also includes a form of self-build shared country. Creating a destination Show Park is in ownership which combines elements of variation my view the best way to encourage the numbers in design with common elements to increase ef- needed to see the wide range of products that ciency – for example, a standard foundation on are actually available and to experience them for which to build. themselves. Tere is also the opportunity to pro- Buikslotherham highlights the range of self com- vide space for meetings and – as with the National missioned homes that can be delivered in an ur- Self Build & Renovation Centre in Swindon – to ban regeneration area. It includes apartments as promote individual elements of a more bespoke well as terraces and also house boats on what was self-build, as well as to meet with builders and ar- a previous dock area. chitects to discuss features of the specifcation and Whilst there are some connections between sites – for example, there are Danwood homes at Graven Hill, and Graven Hill advertises at the National Self Build & Ren- ovation Centre – these are individual “isolated” opportunities to access the market. A house sales map for Potton shows a based around its show centre and manufacturing site near Cambridge.

Te key current main sources of access to information and exemplars are:

design. Te site could also include a Plot Shop. in due course the country would beneft from a Tere are further benefts if manufacturing and number of larger regional show home sites, as is assembly facilities are closely relocated, enabling entirely normal in Germany, it would in my view a customer to select a product and to see how it be best to start with a single site to demonstrate will be built. and refne the operating model. Tis may be possible on a single site, but ulti- As an interim stage, Homes England could play mately the provision of show homes with a mod- a role in purchasing and ultimately disposing of erate but limited sales life is capitally intensive the homes and the site on the open market – ef- and a high cost for a developing business. fectively providing the working capital required to Te alternative is to build the show homes in a support the site operation. location where it is designed-in from the start that Tis site could be part of – and help to de- they can ultimately be sold on as homes forming fne – a new garden settlement. If connected ap- part of a new neighbourhood – and then a new propriately, it would attract national interest as show site is developed elsewhere (and the pattern well as becoming an engine for foreign direct in- repeated). vestment into the UK, including home builders Moving location is likely to mean that the show from abroad as well as small and medium sized home centre may be closely located but not neces- companies in the UK who want to showcase sarily within a single site. Although it is likely that their housing products. i https://www.musterhaus.net/ ii https://www.facebook.com/musterhaus.net/services iii https://www.musterhaus.net/musterhausparks iv https://www.musterhaus.net/musterhauspreis v https://www.blauelagune.at/ vi Austrian Home Manufacturers Federation (Österreichische Fertighausverband) https://www.trivselhus.se/

39 Bristol Community Land Trust's frst community-led development of 12 homes on Fishponds Road, completed in 2016, is now fully occupied and has been a resounding success, demonstrating what can be achieved. Built on land acquired from Bristol City Council, homes are a mix of shared ownership and affordable rent.

The emphasis was on creating an affordable and highly community-focused development, and each resident had to be a member of the CLT, becoming invested in the scheme and the CLT’s ethos.

The residents of the Fishponds Road development were involved right from the start, advising on design, landscaping, and internal fxtures & fttings. They ftted kitchens, tiled their bathrooms, and built bike sheds & bin stores.

Built on the site of a former chapel-turned-school, the scheme demonstrates what can be done by putting residents at the heart of the design & delivery process. Chapter four Using land the public already owns

“It is a dangerous thing to underestimate human potential and the energy which can be generated when people are given the opportunity to help themselves”. Dr Rod Hackney

Some sceptics think that while custom and self- build housing might be a distracting hobby for the well-to-do middle classes, it could not possibly play a major role in solving our housing crisis. Tis deeply mistaken view ignores the vital point Rod Hackney is making above. When people are given the opportunity to be involved in solving the problems they face – including their housing problems – it unleashes a creativity, an energy and a community-building capacity which is not readily available elsewhere, if at all. Many planners in local authorities still prefer talking to a small number of large developers than asking a large number of people in a community what they really want. After all, getting people involved is time-consuming. And people can be so annoying. Tey change their mind. Tey don’t understand the important rules which council

41 ofcials and elected members wrestle with every ment is a signifcant owner of land and buildings. day. In some ways it looks much easier to de- Tese assets are valued at £443 billioni. Teir cide what people really need based on “objective” ownership is spread between many hundreds assessments of housing need and then deliver of diferent public bodies – from hospitals and these needs at scale. It will also probably concen- schools to the prison service and the courts, from trate in a smaller number of places the political the Forestry Commission to county-owned farms fack which may arise from having to accept more and from other local authority land holdings to housing. Yet few stop to ask why it is that so many the Ministry of Defence, the Environment Agen- people – who themselves have somewhere to cy and others. Successive governments have sold live – should think of more housing as pollution. such assets to private buyers – and, on one esti- When Nicholas Boys Smith concludes that we mate, approximately 2 million hectares of land, or should spend less time asking how to build more around 8 per cent of the land area of Britain – has houses and more time thinking about how to been sold in the last 40 yearsii. make houses more popular, he is asking us to One of the reasons for keeping land in pub- address our chief problem. lic ownership is to ensure that there is enough Some year ago, at seminar held in the Queen available for services which we want to have as a Elizabeth II Conference Centre near Parliament community but which won’t be supplied by the Square, councillors from across England gathered market. Obvious examples include allotments – to hear examples from other countries where a to which citizens are entitled by law – as well as community approach – involving custom and public libraries, school playing felds, and so on. self-build – had made a startling diference. Some Over 10,000 school playing felds have been sold were enthusiastic to learn more. But one council- in the last 35 years, contributing to a legacy of in- lor sat with his arms folded, stubbornly declaring creased obesity and diabetes – and increased costs that he wouldn’t be trying it in his area. Asked for the National Health Service. Diabetes costs why not, he replied: ‘It wouldn’t help me meet the NHS at least £10 billion each year. It is the housing need’. Te dismal certainty of a council- leading cause of blindness for people of working lor thinking he knows more about ‘housing need’ age. Each week the NHS performs over 100 di- than people who need housing tells us there is still abetic amputations. Total expenditure associated some distance to travel, but there are sparks of with diabetes is already huge and is expected to energy everywhere. Look at the enthusiasm for grow. Should the government on behalf of citi- custom and self-build projects from Cornwall zens and taxpayers retain more public land – in to the Orkneys, from Norwich to Liverpool this case, ownership of school playing felds – in and from Lewisham to Middlesbrough. Stoke order to reduce costs to the NHS later? Council was so determined to rebuild communi- Take another example. When prisoners leave ties that it sold derelict houses to local people for jail after serving their prison sentence, they need £1 and ofered cheap council loans to carry out at least two things: frst, somewhere to stay (pref- essential repairs. Te top 10 volume housebuild- erably not the drug dealer’s sofa) and second, ers may account for more than half of housebuild- something to do – a purpose in life – either a job, ing but the truth is that not enough of us want to or skills training that leads to a job. It’s not easy buy what they produce – even if we can aford to. for ex-prisoners to get somewhere to live because On behalf of citizens and taxpayers, the govern- most landlords don’t want to risk it. It’s no easier for ex-prisoners to get work – many frms don’t means that the governments we elect are discharg- want to risk employing them. Recidivism – the ing unsatisfactorily their duty – their legal duty – word criminologists use for ex-ofenders commit- to look after precious taxpayers’ money Efectively, ting another crime – cost taxpayers £18 billion Efciently and Economically. per year. In the 1990s twelve unemployed Af- Yet it is an extraordinary fact that when ro-Caribbean men – some of them ex-ofenders planners look at housing schemes, they are not – built their own houses in Chapeltown in Leeds, required to consider the overall social impact. using construction skills they learned at a train- True, a key watchword is ‘sustainability’ but too ing centre which was set up in the wake of the often this means no more or less than what an 1980s riots, chiefy because of the insistence and expensive lawyer at a planning enquiry wants it to sheer determination of one young man, Claude mean. In terms of thinking holistically about the Hendrikson, that he would simply not toler- communities we want to see - and then designing ate having streets where half the houses were and building places for people to live, rather than derelict while he had friends and neighbours large numbers of identical boxes - we are still in sleeping three to a room. Tere are many similar the dark ages. stories from the time when Stella Clarke and John If a young couple with children visit a show Gillespie were driving forward the work of the home on a typical new build development and Community Self Build Agency in Bristol. One ask if they would be able to extend into the roof local resident told the story of how she was advised if they have another baby, they are told in no to apply to the Community Self-Build Agency: “I uncertain terms that it would be out of the was encouraged by the local council to apply for question for structural reasons. If a more mature the CSBA Scheme, I rang them and said; “I am couple asks if there are starter homes in the scheme disabled, unemployed, on benefts and I know so their son in his late twenties no longer has to nothing of building.” Tey said; “You ft all the live at home, they will be told that starter homes criteria!” I have never looked back.” Should the don’t make enough money for the developer. If government on behalf of citizens and taxpayers they ask how much sheltered accommodation is retain more public land – in this case, land where integrated into the scheme, where their elderly there could be more skills training centres, in mother would be able to come to live so that they order to help communities to solve their and her grandchildren could see each other easily, problems, as well reducing guest numbers held at they are almost treated as if they are mad. And Her Majesty’s Pleasure and lowering future costs yet each of these examples comes much closer to in the prison system? the ideal of a ‘sustainable’ community than what Tere are many other possible examples. Te is normally served up by the large house builders, phenomenon of “cost-shunting”, where actions with a green light from local planners. by one part of the public sector – in this case, When starting to plan new developments, it selling land in order to increase income or to save would be very obvious - one would think - to money – have the efect of increasing costs for tax- integrate into the approach the views of local payers in other parts of the public sector, is quite businesses, their needs for staf, the growing rightly a matter of growing concern to the House possibilities for self-employment, the need of Commons Public Accounts Committee. Te for workshops and small business incuba- situation leads to a poor use of public resources. It tors, the views of the local NHS, mental health

43 practitioners, and care providers - never mind – now deliver barely 12% of new housing stock. (speak it softly) the actual preferences of Indeed, the Federation of Master Builders points customers - as well as making sure that the out that since 2017 the number of planning ap- high-speed broadband connections, roads, GP plications granted for “minor residential applica- surgeries and school places are delivered when tions” (defned as between 1 to 9 dwellings) has they are needed, not much later when the fallen from 43,610 in 2016/2017 to 34,065 in pressure has become intolerable. But we are 2020/2021. nowhere near having as the norm a holistic Smaller builders have largely been squeezed out approach, which weaves together the diferent by very big companies who can aford the time strands of what makes a good place to lead a life. and cost involved in negotiating a path through the complex thickets of the planning system. It Building community is no use blaming the big housebuilders for this. And yet the right to build on land at all is a right And mere exhortations that these private business- conferred through a legal process by society as a es must “do their duty” by building more hous- whole. Tere is therefore already an enormous es, more quickly, will fall on deaf ears. As major amount of ‘we’ involved. We should not forget companies they are already doing their duty – their this. And the ‘we’ in this equation need to get fduciary duty to their shareholders – and the fact much better at discerning and specifying what we that these companies have vastly reduced in num- have the right to expect in the places where we ber while growing hugely in size – and that the will have our futures. But as Lord Richard Best SME Builder sector has nearly been destroyed – is told this Review, “we have handed over control a direct consequence of a regulatory environment of the land to people who do not have the public which is both exceptionally complex and fraught interest in mind”. with risk, so that the gaining of planning consents One of the reasons for selling public land is requires both very deep pockets and the ability to so that private sector housebuilders may build bear signifcant risks over very long periods of time. new homes on it. While in some cases this has Te concentration of most housebuilding into few- happened, the result has often not been more er and fewer hands is quite simply an evolutionary houses but rather that the landholdings of major response by big housebuilders to the regulatory en- housebuilders have increased. Such public land vironment in which they are required to operate. is not typically made available for sale to small And to change the course of evolution, one must local builders – although government policy is to change the conditions. support and foster the small building frm sector; Te broader question is a simple one. Should the when the Housing White Paper Fixing our Bro- government use the fact that it already owns public ken Housing Market was published in February land – as a steward on behalf of citizens and tax- 2017, it included in Chapter 3 an explicit policy payers – as a tool to achieve broader goals of public aim of diversifying the housing market and foster- policy, where it can be shown that the achievement ing smaller building frms. of those goals would be materially assisted by its As recently as 1988, SME builders built two holding on to public land over a long period? Or thirds of all houses. Tese smaller players – who would it be better simply to sell it to the highest successfully met local demand and who, crucially, bidder on the basis that by defnition “the market” depended on their local reputation for future sales will fnd the best use for the asset? Te next chapter explores further the way in subject of reducing reofendingvii, all indicate that which – under the current housebuilding mod- a more strategic approach to the deployment of el – large housebuilders actually chiefy compete public resources including public land – to meet for land rather than retail customers, so that the a wide range of housing needs - would, if done concept of a “competitive market” as an econo- creatively and imaginatively, using the ofer of mist would understand it is largely misplaced. But commissioning one’s own house on public land given the current very strikingly oligopolistic through CSB housebuilding (across a wide range arrangements, it is my view that government of tenures) as a recruitment and retention tool, would be entirely justifed in using the fact of its yield very signifcant public policy benefts as well landownership to explore the pursuit of a wider as signifcant long-term benefts to taxpayers. range of public policy goals, while also achieving Indeed, some expertsviii have pointed out that better fnancial value over the long term for its the concept of “less than best” is no longer rele- land holdings. vant in the context of the UK planning system, as Given the great seriousness of our current reordered in the 2004 planning reforms and the housing problems, the exclusion of a whole young current NPPF, and that “Less than Best” is simply generation from the chance of home ownership; an anachronism that was necessary in a land use the fact that more than 4.8 million households planning system, which we have not had since are under signifcant housing stress including 2 2004. Most mainland European countries are way million households in the Private Rented Sector ahead of us in adopting spatial planning practic- facing potential difculty, including many who es and policies, which also explains why the sale have wanted to buy but have been unable to of public land on terms that enable the achieve- aford to do so, and who face poverty in 20 years’ ment of social and environmental outcomes, as time when their incomes will drop but their rents well as economic ones, is so unexceptional and won’tiii; the persistent difculty in retaining NHS unproblematic across continental Europe. staf nurses and the consequent increased cost Ownership of land ofers government a huge to taxpayers of expensive agency nursesiv; the advantage in solving an array of problems, not difculties and associated extra costs of just housing problems. It has only to seize this inadequate eforts to retain expensively-trained advantage. Lord Richard Best told the Review military personnelv; the need and persistent that “whoever controls the land always wins in difculty in recruiting and then retaining teachers the end”. It is now time to use public land more in difcult to fll subjectsvi, as well as the important creatively to ensure that citizens and taxpayers win. i Whole of Government Accounts for the Financial Year ending 31 March 2019 p26 https://assets.publishing. service.gov.uk/government/uploads/system/uploads/attachment_data/fle/902427/WGA_2018-19_Final_ signed_21-07-20_for_APS.pdf ii Te collapse in public land ownership, Prof Christopher Bretts, Financial Times, 8 November 2018. iii https://nationwidefoundation.org.uk/wp-content/uploads/2020/03/Making-Housing-Afordable-Again.-Te-Af- fordable-Housing-Commission.pdf iv https://www.nao.org.uk/wp-content/uploads/2013/02/05061176_Good_Practice.pdf and https://www.nao.org. uk/wp-content/uploads/2016/02/Managing-the-supply-of-NHS-clinical-staf-in-England.pdf v https://www.nao.org.uk/wp-content/uploads/2017/01/Service-Family-Accommodation-update.pdf and https:// www.nao.org.uk/wp-content/uploads/2018/04/Ensuring-sufcient-skilled-military-personnel.pdf vi https://www.nao.org.uk/report/supporting-and-improving-the-teaching-workforce/ vii https://webarchive.nationalarchives.gov.uk/20170207062645/https://www.nao.org.uk/wp-content/uploads/2002/01/0102548.pdf and https://www.nao.org.uk/wp-content/uploads/2017/06/Mental-health-in-prisons.pdf viiiStephen Hill, “Less than best consideration” in Association of Chief Estates Surveyors – Quarterly Journal – Ter- rier: Summer/Autumn Issue 2021 and Charles Dugdale, Partner, Knight Frank LLP “A review of Best Consider- ation legislation is long overdue” https://www.linkedin.com/feed/update/urn:li:activity:6820266210853175296/

45 Agile Homes employs and pays a living wage to those still completing prison sentences at HMP Ley- hill to manufacture advanced closed timber panels. Those involved learn new skills and have the chance of obtaining good full-time work upon leaving prison. “The mood and temper of the public in regard to the treatment of crime and criminals is one of the most unfailing tests of the civilisation of any country. A calm and dispassionate recognition of the rights of the accused against the state, and even of convicted criminals against the state, a constant heart-searching by all charged with the duty of punishment, a desire and eagerness to rehabilitate in the world of industry all those who have paid their dues in the hard coinage of punishment, tireless efforts towards the discovery of curative and regenerating processes, and an un- faltering faith that there is a treasure, if you can only fnd it, in the heart of every man: these are the symbols which in the treatment of crime and criminals mark and measure the stored-up strength of a nation, and are the sign and proof of the living virtue in it.” Rt Hon Winston Churchill MP, Home Secretary, House of Commons speech, 20th July, 1910

“We don’t need to do pilots. We know what works.” Rt Hon Sir Robert Buckland QC MP, Lord Chancellor, speaking to the Bacon Review about investment in high quality prison workshops, 29 June 2021

47 Photograph: Mario Wolf Chapter five Learning from Overseas

o inform my plan I have looked in some detail at other international self-commissioned new build housing markets in de- Tveloped economies to understand what delivery models dominate these markets and identify key learnings for boosting our sector in the UK. It is clear from my analysis that the proportion of self-commissioned housing as a percentage of new housebuilding in other markets continues to be far higher than in England and the wider UK. To demonstrate this, CWE provided updated estimates for a range of selected countries produced by the National Custom and Self Build Associa- tion in 2016 also published by the Government in 2011i and prepared new estimates where this was possible. Tis showed that on average about one in four of all new homes in the markets re- searched for this report are self-commissioned. Indeed, in some markets like Austria, Germany, Poland and Japan, self-commissioned housing is the dominant form of housebuilding – and, in others, it makes a signifcantly greater contribution to housing supply than in the UK market.

49 My analysis has also shown that whilst many Germany countries have experienced a growth in specu- Germany has comparatively higher rates of lative volume housebuilding in recent decades, housebuilding and a much less volatile housing the rate of custom and self-build housing has market registering 293,000 housing comple- remained relatively steady. Although the hous- tions in 2019. Much of this housing is small in ing markets and consumer expectations of new scale with larger housing construction projects housing vary widely between countries, I am being the exception. also clear that in many developed economies it Te house building market is dominated by is routine for developers and local authorities smaller and medium sized regional and sub-re- regularly to prepare serviced plots for sale for gional housebuilders who build a wide variety people to commission the construction of their of homes; with a broader mix of investors, in- own homes from contractors or package com- cluding build-to-rent; and a more predictable, panies, or where land and build packages are front-loaded and streamlined plan-led plan- ofered on large housing sites. ning system that facilitates the steady release of Tis contrasts starkly with the UK where the land and the construction of new homes. housing market has progressively shifted to- Te land tax system is similar but in Germany wards larger housebuilders who promote and the capital gains tax rules place a stronger em- buy large tracts of land to build speculative phasis on long-term investment. housing without engagement with the end user A key market feature is that the German – the customer – who normally gets no choice, housing market is characterised by high levels or very limited choice, over the design of homes of self-commissioned house building (55% of which are built and ofered for sale – and where all homes). Tis is because there is a strong the serviced plot and self-commissioned hous- cultural preference to build single-family or ing model rarely features at any scale. semi-detached homes, but also lower levels of Te trend towards the largest developers is in- home ownership at 43%, compared to 65% in tensifed by an increasingly complex planning the UK. In Germany, custom and self-build and regulatory regime and State intervention to mortgages are widely available from local banks boost large scale housebuilding, favouring large and building societies. Show home villages site allocations and larger developers while actively promote this form of homebuilding undermining the ability of small and medium to consumers; self-commissioned housing is sized house builders to retain a foothold in the popular nationally, with one in every fve new market. detached and semi-detached homes originating As part of my review, I have looked more from an of-site, custom build housing manu- closely at the markets in Germany, France, Te facturer, many of which are represented in these Netherlands, the United States, Australia and Show Park villages. New Zealand and Japan. My focus in this sec- Local authorities play a central role in bring- tion is on the nature of the supply of homes and ing serviced plots to market for local people to land. Previous sections have provided details build their own homes. Local land-use plans as to how individuals can access the market for ‘Flächennutzungsplan’ are used to make ar- homes and plots. ea-wide housing allocations which establish the principle of development and provide certainty Land Assembly measures in Germany for home builders. Te land pooling process allows local authorities Tey also guide the preparation of more de- to designate an area for land assembly and then tailed zoning plans ‘Bebauungsplan’ for areas of negotiate with landowners to rearrange land change or new development. Tey also make ownerships and prepare serviced plots. Plots are efective use of Section 34 of the Federal Build- then sold back to owners at prices covering the ing Code which states that development in a costs of infrastructure and the pooling process, built-up area is permissible if it ‘blends in’ with or they are allocated plots which they can then the character of the immediate surroundings, build on or sell with or without restrictions. If taking account of the designation of the site in landowners are unwilling to participate, com- the local plan. Development in line with the pulsory purchase can be used following exist- allocated zone receives permission in princi- ing procedures, although this is rare. Te pro- ple, although a planning application (building cess which councils follow is clearly set out in permit) is still needed. Once adopted, the local statute to provide consistency across areas and plan is kept under review. Local authorities also transparency with landowners and the public. routinely integrate custom and self-build hous- To stop land speculation the assembly pro- ing when larger sites are planned to accelerate cess allows existing use values to be frozen and build-out, with parcels reserved for collective the process to be started before the local plan projects and building plots alongside other is changed to allocate the site for housing. Tis forms of housing – an approach which featured enables pooling to take account of the original in the recommendations of the Independent value of the land and reduce land prices. New Review of Build Out undertaken by Sir Oliver housing can only be built once the local plan Letwin and published in 2018ii. Tis system has been changed or the site receives planning enables plots to come to market regularly and permission. there are several online housing portal which Urban Development Measures allow local au- link consumers to plots and buildersiii. thorities to designate ‘urban development zones’ Many local authorities assemble housing land and use ‘urban development contracts’ to de- using a formal ‘land pooling’ and ‘reallocation’ velop green feld or large brownfeld sites for process ‘Umlegung’ or through the use of Ur- housing in the public interest. Tis enables ban Development Measures ‘Städtebauliche them to buy land at existing use value and Entwicklungsmaßnahmen’, set out in statute. bring forward building plots for local people Te land pooling instrument is particularly fa- quickly, often for building groups (Baugruppen voured by smaller rural authorities to bring for- or Baugemeinschaften) at relatively low prices. ward afordable custom and self-build plots for Cities like Tübingen have made extensive use of local people, although cities like Bonn, Frank- these measures to bring forward custom build furt, Hamburg and Munich have also used land housing for local people. pooling. Stuttgart for example has brought forward 45 sites for 14,000 homes in over 20 Plots are also widely provided to local peo- years; Kaiserslautern 70 sites for almost 3,000 ple on a leasehold (Erbparcht) basis by councils, homes in similar time and Dortmund delivered particularly in Bavaria and other rural areas, in 8 sites for 1,000 homes in just four years. order to reduce costs and incentivise building.

51 Te public sector retains ownership of the land choose their own architect and project manager, with a building lease as a charge on the proper- but it is a still a co-operative”. ty (usually up to 99 years with short term lease- Notwithstanding such measures, the German hold and purchase options available). housing market is fnding it increasingly difcult Leaseholders can then build a home in their to deliver housing which meets demand and is af- ownership but must pay plot service costs. Leases fordable, particularly in urban areas, with key bar- are typically paid quarterly and linked to the Con- riers including lack of housing land and complex sumer Price Index. Tey can also be extended. If the regulation. Tis is now being addressed through landowner (council) wants to take ownership of the new laws which have recently been approved by property, they must compensate the homeowner for the German parliament (see box below). two-thirds of the current value of the home. I heard from Dr Michael LaFond who said that Legislative action to promote more the Berlin State now exclusively leases its land and affordable housing in Germany ofers sites to building groups and co-operatives Te new German law on the mobilisation of to build high quality homes within set time pe- building land (“Baulandmobilisierungsgesetz”) riods. Sites are typically ‘concept tendered’ where came into force in June 2021 and has made sweep- applicants must demonstrate how they will create ing changes to enable more afordable housing. innovative, well-designed, afordable housing for This includes: disadvantaged population groups. Tis approach •Time-limited changes to allow built up areas is now widely used by Councils across Germany. to be zoned specifcally for subsidised aford- Dr LaFond stated: “Berlin has gone into the busi- able housing. ness of buying property from the market with the • Extended rights of frst refusal for munici- frst right of refusal. Tis means that if a property palities to intervene where land allocated in a comes onto the market, the city can intervene and local plan and is being sold, allowing them to buy it or say we would like someone else to buy buy the land under the same terms as agreed it, which could be a cooperative. It is sort of like with the buyer, subject to certain conditions neighbourhood protection from gentrifcation”. like being in a high housing demand area. Herr Cord Soehlke, who is “Baubürgermeis- • Enabling Councils to stop the conversion of ter” for the City of Tübingen (indirectly-elected rental apartments into owner occupation where Mayor for Building) described an idea they cre- more than fve residential units are involved. ated called a “roof co-operative”, where the City • Time limited extension of the law enabling of Tübingen and private partners created one big Councils to accelerate the preparation of zon- co-operative, with various diferent projects all ing plans for sites with homes up to 10,000 under one roof, Tis ofered a great deal of free- sqm foorspace, where they adjoin existing set- dom to individual projects, with potentially 30 or tlements. 40 diferent projects all under this one co-opera- • A new “village residential zone” land use tive: As Herr Soehlke explained: “All the technical category to enable more development in vil- and legal parts can be dealt with at this higher lages and enabling higher density development level, while at the bottom level of the co-operative through changes to makes zoning laws more is the project energy, where the people provide fexible, including greater use of permitted the passion and energy for the project – they can development rights. France ity, apart from some very targeted social hous- Despite high prices and housing shortages in ing development in urban areas. In May 2021 the Paris region, France has steadily built on housing starts rose 3.6% to a seasonally adjust- average about six homes per 1,000 inhabitant ed annual rate of 1.572 million units. every year, with some 408,000 housing starts Te country operates a diverse, federal in 2019. Home ownership at 58% is lower than state-controlled, but highly regulated land use in the UK, but not dramatically so. A large so- zoning system (California notoriously strict, cial housing sector has contributed signifcantly, Texas notoriously fexible). In general, housing with the aid of direct subsidies to housing in- is more afordable across the US despite higher vestment and production levels. GDP per capita and on average homes that are Many French people still favour single homes larger than in the UK. and about 1 in 3 homes (31%) are self-com- Unlike in the UK, there is a signifcant pri- missioned, mostly built by the large number vate sector land development industry which of SME home builders. Planning is largely de- supplies serviced land to volume housebuilders. volved to the communes or the Metropole for Although the US developed the mass produc- larger cities. As in Germany, there is a broadly a tion of standardised suburban housing, signif- zone-based planning system in France applied icant consumer pressure to produce more dif- through binding local plans (Plan Local d’Ur- ferentiated products has signifcantly diversifed banisme), but with more discretion to make choice for homeowners. Tis has led to a steady decisions within designations. increase in customisable housing where buyers Signifcant efort is put into land assembly can design their bespoke home online. by municipalities and communes but there are It is now normal practice for building compa- state agencies with powers to buy and sell land nies to ofer a one-stop-shop to new customers (including through compulsory purchase) and which allows choice over plot and house design. collect taxes on development value. Large homebuilders like KB Homeiv who is one Although prices are rising it is very common of the top 10 builders in the USA, having built to fnd serviced building plots on the edge of over 11,000 homes in 2019, for example, ofer towns and villages. Tese are usually facilitated customers a wide range of customisable house by the local Mayor who directly acquires an area types on their sites. Te company prides itself of farming land (at agricultural land values), that no two of its homes are ever the same be- and then secures permission for the land to be cause it gives the customer the ability to per- re-zoned for housing, which is then serviced by sonalise their new home, from foor plans to ex- local contractors for sale at fxed price to local terior elevations, to design options and choices people to build their own homes, often with over their plot. some local conditions imposed. Te creation of Te US Government also has a national afordable housing and retaining people in the Mutual Self-Help Housing programme which community are key drivers for this action. provide loans to low-income families to build their own homes through non-proft self-help United States of America ‘grantee’ housing organisations. Te programme Te USA is similar to the UK in that house- has facilitated more than 50,000 low-income building is almost wholly a private sector activ- families to build their own homes through

53 non-proft self-help housing organisations. and suppliers are contracted by the company to Self-help (sometimes also called ‘sweat equi- build the homes for customers. ty’) means homes are built wholly or partly by Our analysis shows that about half of the their purchasers. People’s Self-Help Housingv new build housing market in Australia ofers for example is the longest-serving non-prof- customers customisable new housing. Tis in- it housing organization on California’s Cen- cludes German-style building group develop- tral Coast and exclusively targets low-income ments which are coming forward around cities, working families who cannot access decent and especially in Western Australia. afordable housing. Under the self-help mod- Australia also has a First Home Loan Deposit el families join together to build each other’s Scheme which supports eligible frst home buyers homes, earning equity, reducing construction to build or purchase a new home. Owner build- costs, and making lasting investments in their er loans for self-builders are also ofered, but to community. access these loans people need an owner builder licence and must complete a recognised course. Australia Most new housing in Australia is delivered by Japan property developers who build customised new Japan has one of the largest new housing mar- homes for new home buyers. Developers buy kets in the world (6.42 new homes per 1000 land once it is zoned and released for hous- people)vi. Housing development involves in- ing by the local council as part of their ‘Local dividual households recycling their plots back Planning Schemes’ (local zoning plans). Tese onto the market. Tis means housing suppliers plans typically include standards for plot sizes, do not proft from trading in the land market. required set-backs from boundaries and garden Unlike in other countries, Japanese homes space. Special provisions are also included for are typically replaced within about 30 years giv- multi-unit developments. In many cases, de- en that housing gradually depreciates over time. sign guides and Codes are prepared by land- Our estimate is that some 56% of all homes are owners as part of new estates. customisable, many being apartments, with 75% Te builders then service the land, and either of newly built detached homes commissioned by build homes and sell them as a complete house individuals and built on their own plot of land. and land deal, or ofer a number of standard Most of these homes are built by smaller local or customisable home designs that are built to builders or larger regional or national suppliers order. like Sekisui House using factory-based systems G.J. Gardner Homes is one of Australia’s top using modern methods of construction which 10 home builders, building about 2,000 homes are customisable. a year across Australia, and has also expand- Japan’s planning is also zone-based where the ed into the New Zealand and North Ameri- government sets out clear guidelines on what can markets. Te company ofers of-the-plan can be built in each area. If new development builds for its customers from over 100 options, complies with the rules it is allowed by right. bespoke design custom home house and land Tis has helped with providing more certainty package. It has a unique franchise model where for house building. In 2018, Japan saw 942,000 local custom home builders, sub-contractors housing starts. Contrary to what many may think, it is perfectly importantly also its layout as well. This is because possible to apply self build principles to apartment the apartment is delivered as a shell with the as well as houses. The fully completed and sold customer free to choose the location, size and Black Jack Apartments in the Netherlands are a fne arrangement of the rooms (in-house architects example of this approach to urban self building. This providing a service if required). Clearly plans need apartment is an important part of a highly success- to comply with relevant building regulations. ful urban redevelopment of a previously industrial area, which includes both self build terraces and The building was delivered by way of Collective house boats. Blackjack is a 38m high, mixed resi- Private Commissioning. This is typically a non dential and commercial building that includes 8 and proft association, which acts as the principal to a half stories of residential self build. the architect and contractor of the project formed from the purchasers of the units. Cost effciency The exterior of the Black Jack development was is achieved through a lack of developer profts, defned by the architect with clean modern lines and through the costs savings that come from the of foor to ceiling glass exterior walls (or doors, or choices of how to kit out each shell. Mortgages windows - you choose) surrounded on each level were available for those who needed them. by a continuous terrace. The architect also designed the core central features - lifts and stairs and This approach of subdivision into small hubs, that services. The approximately 300m2 on residential can then be combined, is also applied to conver- each foor was then divided into approximately six sions of offces to residential spaces. The result hubs of just under 50m2 - 48 hubs in total. These increases affordability, choice and creates a more hub units could then be combined horizontally mixed community through the access to different or vertically to create larger units. Homeowners sized plots. The frst self-build shell apartments are could select both the size of their apartment and now beginning to appear in London.

55 Netherlands the provision and sale of permissioned serviced Despite its size, the Netherlands has led the plots to both individuals and housebuilders. way in innovation in the custom and self-build housing sector, with the new town of Almere Planning – the planning system in almost ev- being an international model of what can be ery country is based on some form of zoning achieved at scale and cities like Amsterdam, which allows the owner of zoned land to build Te Hague and Delft initiating a wide range of whatever is permitted by the rules. Tere are projects on public land. diferent levels of fexibility in diferent regimes. However, essentially one has a right to build Delft whatever is permitted by the zoning regulations. Te historic city of Delft, which hosts the Uni- versity of Technology – the highest-ranked uni- SME builders – custom and self-build is large- versity in the Netherlands – has used custom ly delivered by smaller and medium sized, of- and self-build to transform its approach to ur- ten local, builder. Boosting serviced plots, will ban planning, with the explicit aim of becom- drive up SME housebuilding signifcantly. ing a more attractive destination for the industries of the future and the people who will work Customer Choice – other markets ofer homeowners in them. See page 61 far greater choice over the type and design of their homes. Even volume builders in the US and Aus- Transferable lessons tralia ofer signifcant customer choice and options I am clear that our custom and self-build indus- to customise their homes. Te German show home try continues to lag far behind other developed park concept is a key driver for take up. countries. Although each housing market is diferent Delivery at scale – there is no doubt that custom and is highly dependent on local culture, ad- and self-build housing on serviced plots can be ministrative, regulatory and fnancial regimes delivered on both small and very large sites. that exist in each housing market, there are a number of notable conclusions for my analysis Customisation and Modern Methods of Construc- of other market which I think are relevant to tion (MMC) – customisable homes are very the UK. dominant in other markets and many use MMC.

Land Assembly / infrastructure – most other Support – other countries ofer custom and countries have a more developed land devel- self-builders more support, whether through opment or land assembly function. In Europe schemes like the First Home Loan Deposit this is largely a public sector function, in the Scheme in Australia, Self Help Housing Pro- US and Australia there are private land devel- gramme in the US or easy access to mortgage opment companies. In both cases the output is fnance in Germany.

i Laying the Foundations: A Housing Strategy for England (Page 14, HM Government, 2011) ii https://www.gov.uk/government/publications/independent-review-of-build-out-fnal-report iii For example immonet.de; immowelt.de and immobilienscout24.de. iv www.kbhome.com v www.pshhc.org vi https://www.statista.com/statistics/667913/japan-dwellings-construction-starts-2015/ A modern new self-build thatched house in a beautiful neighbourhood near Amsterdam, The Netherlands

57 Asked whether they were worried about the home designs of others, residents simply responded: “Why would anyone choose to build a home that was not as beautiful as they could make it?” Photograph: Andrew Baddeley-Chappell

A beautiful garden square created from then decided together how to landscape. self-build plots at Escamplaan in Te Individuals signed up for the chance to Hague, Netherlands get a plot of their chosen width and then It is hard to image that this terraced built homes of diferent heights and sizes, square is surrounded by dual carriageway enabling a postman to live next door to industrial units and bland and uninviting a surgeon. Te same builder was chosen 1980s homes. Te housebuilders have to build many of the substantially difer- given up some of their private gardens ent looking homes. Residents praise the for a larger community space that they tremendous sense of community.

59 A beautiful row of new custom-built A major urban redevelopment in the city terraced houses in Delft, Te Netherlands centre has seen a previously raised rail line Te historic city of Delft, which hosts which had cut through the city centre the University of Technology – the high- placed underground, while the train station est-ranked university in the Netherlands area was substantially redeveloped. – has used custom and self-build to trans- Higher density self-build terraced homes form its approach to urban planning, and apartments led the redevelopment pro- with the explicit aim of becoming a more cess, helping to attract and retain wealth attractive destination for the industries creators linked to the university. Te of the future and the people who will project has increased the desirability of the work in them. area for subsequent phases of development.

Photograph: Andrew Baddeley-Chappell Chapter six Delivering real change that works

he lack of choice and competition within our new homes market has signifcant consequences for our nation in regard to Tboth the demand for new homes and public attitudes towards housebuilding in general. We can build more and better homes that more people want to live in, which are greener and cost less to run, which communities are happier to see built – and which ordinary people on normal incomes can aford to buy. As evidenced elsewhere in this report, the capacity to deliver more self-commissioned homes already exists here in United Kingdom and also overseas, if we should wish to fll a supply gap in the short term. Tere is a very strong evidence base of demand for self-commissioned homes that is additional to the existing supply of new homes. If more opportunities existed for consumers to commission a home of their own, then capital – attracted by dependable returns – would fow into this currently under-served market, creating jobs, skills and wealth. Other economic and social benefts would ensue from a nation housed in safe,

61 warm, healthy, well-designed and energy-efcient selves a product of a system introduced in 1947 homes. – Te Town and Country Planning Act – which At the heart of the issue of our broken housing efectively froze in time the pattern of settlements market is the current delivery model – increasing- as it was in 1941 and nationalised development ly hard-wired into the system – which produces rightsiii. an homogenous product that most people would Competing to secure the means of production not consider buying, which is on average small- necessary to continue trading (roughly speaking, er than anywhere else in Western Europei, which this means holding at least a six year land sup- routinely falls short on supposed energy efciency ply for a large housebuilder) is a natural response standardsii and is becoming ever more expensive. for any business. Optimising returns by manag- How did we get here? Leaving the delivery of ing output and keeping out competitors to avoid new homes almost exclusively to the private sector, the oversupply of regional markets is exactly what a decision made in the late 20th century, should in shareholders demand. theory have led to a highly efcient industry, driv- A more liberal land market could have result- en by market forces to be innovative and diverse, ed in a very diferent outcome, much more akin with supply rising to meet demand. Yet somehow to housing delivery models seen in the oversees the very lifeforce of a functioning, free market – studies presented in this report. But England is competition – has been stifed. Te new homes diferent, not least because land ownership itself market is increasingly controlled by a small num- is highly concentratediv amongst individuals, in- ber of large housebuilders. SME housebuilders, stitutions and corporations that take a long term individuals and community groups are increas- view on holding this asset class. Add in a plan-led ingly left to pick up the leftover sites that don’t ft system that is convoluted, slow and expensive to the ‘cookie cutter’. navigate, made worse by inefcient and inconsis- Te reasons that the number of SME house- tent land value capture mechanisms, and the ef- builders has declined over the past 20-30 years are fective outcome is a very high barrier to entry for well documented; the winnowing efect of boom new, alternative models of housing delivery. and bust cycles in house prices, increasingly bur- Te political sensitivity of housebuilding also densome red tape, consolidation driven by the ensures that what little land does come forward need to control land supply into a focus not on for development is predominantly made up of building new homes but instead making changes large strategic sites that only the largest corpora- to the existing housing stock. It is ironic that the tions can fnance. Individuals, community groups outcome of leaving housebuilding to the private and SME housebuilders are unable to compete. sector is output every bit as bad as that of a cen- Tey lack the resources to promote land and se- trally planned economy; characterised by under- cure an allocation for housebuilding or to fund supply, inefciency, a lack of innovation and low front loaded land value capture mechanisms and productivity. unlike afordable housing providers are rarely With their ‘landbanks’, addiction to taxpayer brought in to take on part of a multi plot site. subsidy and supernormal profts, the big house- Tere is widespread recognition that the system builders are an easy target, but it is short-sighted is broken, yet the status quo suits those making to blame them or to attempt to curtail their out- the planning decisions as much as the big house- put though market intervention. Tey are them- builders and crucially, also the politicians whose constituents militantly object to ‘concreting over Individual self build homes – these homes are typi- the countryside’. Under the current system, the cally single dwellings as a result of inflls within or inevitable political fallout from new housebuild- on the edge of existing settlements, replacement ing is highly concentrated on only a few voters. dwellings and conversions. Tese homes are typ- Meanwhile, under resourced planning depart- ically individually designed, often using an archi- ments can condense their workload by meeting tect / designer and built by a local builder. A high land supply targets through allocating a small proportion use elements of modern methods of number of large strategic sites. construction, and there is a strong incentive for In theory it makes sense to centralise plan mak- long term owners to invest in energy efciency ing and the means of production to mass produce and quality to reduce ongoing running and main- housing for the nation cheaply and efciently, tenance costs. Tese homes represent the majori- rather than leave it to individuals or the relative ty of current supply, not least as they represent the inefciency of SMEs. Te benefts, however, are main access route to land for individuals. Tere overwhelmingly in favour of the big corporations, is signifcant potential to grow this sector, and at which control land options, are able to hold sig- speed, in particular in areas of high housing de- nifcant infuence over the planning process, ex- mand and outside of larger settlements. ercise near monopoly control over new homes Small custom build developments – these are typi- markets on a regional basis and use economies of cally sites of up to around 20 homes on the edge scale to drive down costs and boost proft margins of existing settlements. Tese homes may be of- rather than increase output. fered as serviced plots or as customisable homes The outcome of the current system is that by a single developer who uses a design code to housebuilders compete with each other in ensure the harmony of the site and with the wider the land market and not the product market. area. Tere is signifcant potential to grow this Unlike almost any other aspect of the modern sector, with high demand from those seeking the consumer society, new homes are not shaped benefts of choice and of doing so alongside oth- by the market forces of the customer, but ers and as part of a community. those of the land market, which inflates prices, Custom build developments within larger sites – for supresses the size of new homes and gardens, the market to become mainstream, the sector leads to the homogenisation of product and needs to develop on larger sites. Tese larger sites constrains output. ofer the potential for more afordable land and My aim is not to replace the existing model of the opportunity for some greater fexibility with housing delivery but to improve on it by ofering regards design and appearance. Tis market has another alternative, at scale. To do this we need the potential to become the prime delivery model to address the challenges that are leading to the but is currently the least developed, not least be- current under supply. cause it requires a scale of operation that does not currently exist to operate efciently. Tere are also Approach to delivery strong disincentives for large housebuilders who Whilst the custom and self build market is a control such sites to bring in competitors for their spectrum defned by the principle of custom- own product, as well as the challenges of sharing er choice, it can be broadly separated into three access to a construction site with other parties delivery approaches. outside of their direct control.

63 Delivering permissioned land creates its own challenges not least the view from through the planning process some that a local plan can trump this primary leg- Permissioned land is without doubt the single islation. In practice both duties must be met, but greatest constraint to the growth of the self com- the Right to Build duties are best met through a missioned housing market. Access to the land local plan that anticipates and accommodates the market through the provision of serviced plots Right to Build. is key to increasing delivery. Tis is a challenge Te stated aim of the Right to Build legislation faced by the whole sector but one that appears (as amended by the Housing and Planning Act weighted against those that seek to provide hous- 2016) was to double the size of the sector by 2020. ing diversity such as community groups. Tis has not happened. Whilst the legislation has Te supply of homes is regulated by a plan-led increased awareness and has been enthusiastical- system that is inefcient in delivering the right ly embraced by many local authorities aware of homes in the right places. I commend and sup- the benefts that such homes bring there has been port the Planning for the Future White Paper and too much inactivity and it some cases direct and the proposals to update and improve the planning shameful action to subvert the legislation. Tis system. Te resistance to change is a projection includes: of the current failing system where the losers are • Local authorities stating it is acceptable to the silent majority seeking a greater range of more count every single residential planning permis- and better homes, a system heavily weighted in sion as custom and self build. favour in ‘insiders’ at the expense of ‘outsiders’. • Local authorities adding unsubstantiated addi- Obtaining planning consent is slow, burden- tional costs onto their already high fees. some, complex, expensive, and uncertain. Nu- • Local authorities requiring individuals to have merous witnesses have made the claim that the a mortgage ofer (for which they need access to planning system is geared specifcally towards the permissioned land) before they can join a register needs of volume house builders and large proj- aimed at helping them fnd permissioned land. ects. Tis, in conjunction with the widely cited Tis also excludes any assessment of demand from and self-evident resourcing pressures on planning those seeking an afordable self commissioned departments, means that they have less capacity home. to engage with smaller scale plans. Witness testi- Te Government has announced a review to make mony has set out how the reduction in local plan- the Right to Build deliver as intended and this is ning department capacity and an inevitable “tick needed before the legislation becomes optional. box” approach. In addition to addressing loopholes, it is import- Since 2012 the planning system has needed to ant that the legislation and the planning framework consider the demand for custom and self build provides a route to delivery of the plots that are homes. In practice such activity is rarely under- needed. Tis is about delivering the right homes taken in a robust way. Te result is that local in the right places – ensuring buildings that are at plans rarely refect either the underlying demand ease with their surroundings and development on a or the underlying preferences of the market. scale appropriate with their surroundings. Te sector is signifcantly supported by the In the short term there is substantial undersup- Right to Build legislation. Tis works to a difer- ply and high demand for single plots and small- ent (shorter) cycle to the local plan process. Tis er scale developments. Te latter in particular would beneft from and windfall / exception site home had done so to the design or specifcation policy linked to any under-delivery in response of the homebuyer. Self build and micro develop- to latent demand but also and importantly under ment are closely related and the delivery of single the Right to Build. plots is an important mechanism for growing the When made aware of the benefts many land- sector. Provide more opportunities for land on owners favourite a custom and self build approach. which to build and the market can grow to meet Tis is not just for the quality of the homes that demand. For smaller developers this means more are delivered, but due to the opportunity to sell work initially through transferable skills but in land on a retail rather than wholesale basis. Too the longer term through a larger workforce and / often however initial enthusiasm is dampened by or modern methods of construction. a system focused on the sale to a single developer Custom and self build is not only already pres- reinforced by a less favourable tax system for indi- ent on single plots. Many smaller local builders vidual plot sales (see below). are willing to ofer fexibility on design and spec- Te constraints are not just the access to land ifcation on smaller multi-plot sites. Tis may be that is capable of being permissioned, it is the an active strategy (for cash fow reasons), part of planning approach itself. Our planning approval their service led approach in response to the client system too often seeks to maintain the mediocrity needs, or a deliberate sales led approach. Small- of the past and fails to recognise the variation that er developers face wider challenges in addition to exists, and is integral to, the beauty of our estab- land including and importantly access to funding lished settlements. Too much efort is being wast- (see below). ed on matters that are of marginal signifcance. Graven Hill represents the single largest custom Customers rather than planners are far better at and self build site in the UK. It has acted as a making valued judgements over the quality and valuable source of learning for the delivery of such appearance of their home, albeit within a design sites at scale. It has pioneered in the UK the use code framework that delivers an appropriate level of design codes alongside a supportive planning of harmony and alignment. process. It has shown how some customers are de- terred by a full freedom of choice and the role in Lack of supply the market for a customisable model. Tis option It is hard to understate the challenge presented by is preferred by those who are time poor, and like the lack of access to development land, and the im- the certainty that comes with such an approach. pact that it has on the supply of homes. It is not just Graven Hill has also highlighted the challenges of the absence of land but the challenge of fnding land access to mortgage fnance and with some aspects and taking it through the planning process, from of taxation, in particular VAT (see below). application, (appeal) and approval. Tis process Delivering custom build on large scale can be involves time, money, and an appetite for risk. It broadly divided into the delivery of serviced plots is a process that many simply elect not to take and and the delivery of the homes on those plots. the housing supply that exists now is primarily the Delivering plots at scale requires the emergence market a response to the challenges of access to land. of enablers acting from the earliest stage of the Most self-builds are built by local builders. Te development process through to the sale of the Federation of Master Builders (FMB) survey plots. Te delivery of homes on these plots re- found 82% of its members who had built a new quires a more signifcant investment in sales and

65 production capability, from multiple companies bedded energy and the move to net zero. Te last providing choice and competition. Tis missing detailed report on the sectorv from completions market is an attractive opportunity but enterprise in 2016 and earlier identifed that: Around 50% needs to have confdence in the ability to create of all self build homes had a sustainable primary the scale market that should exist but which has heat source with air-source heat pumps being the to date struggled to emerge. most common (22%) followed by solar (11%) and ground source heat pumps (8%). Te same report Access to fnance identifed that around 50% of all homes were built Custom and self build is a fnancially attractive using an MMC approach with the most common opportunity for developers. Funding is typically being timber frame (35%) and SIPs (8%). provided in stages, often upfront by the customer. Te increased use of timber is highly suited to a Tis reduces risk, improves cash fow, and reduces customisable build. Greater use of timber, both in- funding requirements for the developer. side and outside, brings particular benefts to a cus- Te market is currently well served with funding tomised model due to the increased fow through except for those with smaller deposits. Tis is pri- into ofsite construction and the subsequent speed marily due to regulatory constraints rather than the of assembly. Tis in turn helps facilitate a market risk appetite of lenders. Te nature of the custom where there is the unlinking of the development of and self build process means that the current Help the land and the building of the home. As we have to Buy scheme cannot be used in most cases. Tis seen in Germany this allows the development of gap will be closed by Help to Build which is an Show Home Parks a critical gap in the UK currently. important element in opening up the market to a Greater use of timber requires homes that are safe greater range of buyers. However, the residential and can be maintained. International experience lending market has been woefully slow in refecting demonstrates both these to be readily achievable. the quality and sustainability of many custom and self build homes and this could become a signif- Te challenges of Tax cant inhibitor to growth (see below). Te tax system is broadly supportive to the delivery of Despite the attractiveness of the funding profle for new homes. However, it is a system that has been de- developers, this is not typically understood by the developed in response to a speculative build model. In a velopment fnance markets who to date have failed to limited number of places, it is yet to be suitably fexed adapt their approach and their equity requirements to accommodate self and custom build so as to not to this diferent profle, a problem replicated with favour one approach to home delivery over another. Homes England funding. Tis makes it hard for busi- Te result is not a greater tax take but a suppression nesses to enter and expand within this market. of market activity and / or a route to delivery that is more tax efcient but less build efcient. Action to Modern Methods of Construction level the playing feld will increase activity and in do- and sustainable homes ing so facilitate more economic activity and a greater It is hard to empirically prove but it is generally overall direct and indirect tax take. accepted that custom and self build has been at the forefront of the development of more sustainable Te role of Homes England homes. Tis is most noticeable in the energy ef- Despite the refence to diversity within its strategic fciency of the home but increasingly in the em- plan, Homes England has been overly focussed on the easiest possible way for it to deliver the largest multi plot sites or parts of a large strategic land site. number of homes. As such it has reinforced rath- • Planning consent for ‘reserved matters’ details er than challenged the dominance of the largest needs to be rules based and simpler to navigate, housebuilders. It has no records to demonstrate allowing housebuyers to make decisions on cus- the numbers of custom and self-build homes that tomisable elements of a new home on a serviced it has delivered or the amount of funding it has plot predictable, and securing lawful consent fast supplied. However willing in theory; its processes and simple. Tis is key to enabling developers and controls are not designed for the market that to ofer choice. Change this and we will reinvigo- it clearly does not fully understand. rate SME builders and empower community led Homes England is changing. Its new purchas- housing as well bringing diversity back into our ing approach is more inclusive and it is showing housing market. an appetite to at long last address the need for Make these changes and the evidenced demand greater diversity within our housing market. It for individually commissioned homes will lead to is embracing new technology and MMC but ap- growth in the sector. Tere will still remain a sub- pears to have done so through the lens of a large stantial missing market for customisable new homes. builder (lots of the same) rather than a customer Tis market has huge potential to deliver increased focussed manufacturer (such as the car market) competition and quality and efciency into the new ofering mass customisation. homes market with the beneft of scale, but there is Te Homes England Strategic Plan states: “We a current “chicken and egg” challenge. accelerate delivery, tackle market failure where it Delivery of mass customisation is strongly occurs and help to shape a more resilient and di- aligned to modern methods of construction (well verse housing market.” Now is the time to deliver established in overseas markets). It delivers ad- on that statement, through ensuring that appropri- ditionality of supply but needs confdence that ate custom and self build plots are an assumed part the market will emerge and the land will be avail- of any Homes England development in the format able, at the level an efective scale market requires. most appropriate for the market and the site. Homes England have a critical role to play here and an established (if underactive) capacity to ad- Te Route Map dress market failures. My recommendations below set out the detailed Some of this new market risks being under- changes that I believe are needed to support growth served by the challenges of access to fnance. in all parts of the custom and self build market. Help to Build is key but the lending market • Te core of any change is access to development needs to fex towards the nature of the sector, and land through a reformed planning system that is do more to embrace greener and more efcient better attuned to delivering the opportunities to technologies. As with tax, the changes required build the homes that people want to live in. Tis are fne tuning rather than fundamental but they means serviced plots, whether single sites, small are important.

i https://www.architecture.com/-/media/gathercontent/space-standards-for-homes/additional-documents/ribacase- forspace2011pdf.pdf ii https://eciu.net/news-and-events/press-releases/2019/data-just-1-of-new-homes-being-built-to-highest-efciency- standards iii Te fnancialisation of housing land supply in England iv https://www.theguardian.com/money/2019/apr/17/who-owns-england-thousand-secret-landowners-author v Home Building & Renovating Self & Custom Build Market report 2017

67 68 THE ECONOMIC ANALYSIS

1. The purpose of this economic analysis is to un- 6. It goes onto explore the reasons why a missing derstand why it is that custom and self-build (CSB) market could exist – why we are not getting more remains a peripheral part of housing supply in En- CSB – and what could be done to remedy this. It gland and to examine its potential for scaling up. then goes on to consider the benefts of CSB. Man- CSB covers a spectrum of housebuilding activity. The ifestations of an improvement in social welfare in- Right To Build Task Force makes the crucial distinc- clude, conceivably, increased overall housing supply tion that a self-build home is one built to the plans (i.e. flling a missing market), better quality of new or specifcations of the occupant on a single plot. A housing, better value for the consumer (including an custom build home is built to the plans or specif- increased consumer surplus), greater sustainability, cations of the occupant on a multi-plot site actively and other important outcomes such as these. managed by a third-party member. 7. Finally, the analysis considers what the barriers 2. The analysis estimates that CSB build in En- to scaling up CSB are and what the scaling up po- gland is around 5 per cent of new supply. Within tential of CSB could be in the context of getting CSB currently, self-build is overwhelmingly dom- us to the point where 300,000 homes are built in inant, but custom build probably has the greatest England each year. potential for scaling up. DEMAND 3. On the one hand, the low share of CSB in new 8. There are two broad custom and self-build de- supply may simply refect the public’s preferences, in mand indicators: survey-based and Right to Build which case the housing market and regulation are Registers. These are considered in turn. acting in the public interest and, in the economic parlance, social welfare is maximised. On the other Survey-based hand, the low share of CSB may be below what the 9. A long time-series of general population surveys public preference is, because of a market failure and/ have shown a signifcant level of public interest in or institutional failure, in which case the housing CSB. Studies have consistently shown that around market is not acting in the public interest and social a third of the general population are “interested” welfare is sub-optimal. in self build, whilst 12 per cent report being “very interested” in the most recent YouGov polling for 4. It is important to recognise that the term ‘market’ NaCSBA.1 Contrary to perception, interest appears is used relatively loosely in the context of housing to be strongest amongst younger people and this supply, because the supply of land for housing is ra- also implies frst-time buyers. One survey indicated tioned through regulation (i.e. it is controlled by the that nearly half (48%) of those between 18-24 are planning system) and this means that housing de- interested and 45 per cent of those between 25-34. livery is not driven wholly by the market. It is better, Another survey suggested that the numbers could therefore, to describe it as a system. be higher still, with 61% wishing to commission a home at some point in their lives, with even higher 5. In examining whether the system is delivering interest among 18-24 year-olds, at 83%.2 what the public wants with respect to CSB, this analysis considers what the evidence says about 10. Given these are representative surveys, ‘aspira- the public’s demand for CSB and whether, using tional demand’ can be gauged by assuming 12 to 33 our best estimates for supply of CSB, that demand per cent of all households would like to CSB, apply- is being met and so whether fundamentally there ing the ‘interested’ and ‘very interested’ shares to the is a missing market. household population. However, there is a distinc-

1 https://nacsba.org.uk/news/1-in-3-adults-interested-in-self-building/ 2 Self Build: Exploring the Opportunity for a Self Build Mortgage Product (2018), Nationwide

69 tion between aspirational demand and effective ample, one without a planning system and plentiful demand. For example, many aspire to own a Ferrari land for housing. but clearly cannot do so. Effective demand takes account of the budget constraint (and the availabil- Right To Build Register ity of fnance). demand indicator 14. Under the Self-build and Custom Housebuilding 11. The number of transactions in the market – Act 2015 all Local Authorities in England must keep across the entire housing market, not just new build – a register of people and groups of people who are is a refection of effective demand. There are around seeking to purchase serviced plots of land in the au- 1.1 million housing transactions a year in England thority’s area. In practice registrations may refect a in the steady state, according to HMRC stamp duty more general interest in CSB rather than specifcally data. There is of course wide variation by household serviced plots. type: older people move much less frequently, for example. 15. There were 45,664 households and groups on the Register as at October 2019.3 A later fgure of 12. This suggests between 132,000 (12%) and 55,785 for October 2020 was obtained by the NaCS- 363,000 (33%) households in England a year wish to BA via Freedom of Information (FOI) request. Given CSB and have the means of doing so, assuming par- this is a stock number, it gives an indication of unmet ity in cost and in the availability of fnance between demand at those points in time. CSB and other forms of housing purchase. There are reasons why this is not necessarily the case, espe- 16. All in all, the registers suggest demand for CSB cially given what is (usually wrongly) perceived as in England is just over 16,000 a year (56,128 cumu- the higher risk profle of CSB; indeed, the small but lative registrations / 3.5 years), though acknowledg- quite mature CSB mortgage market – mainly offered ing 2016 and 2017 are likely to have signifcant pent by smaller building societies – has a lower default up demand meaning the fgure could be lower. But rate than for conventional mortgages. there are several reasons why the Register may not refect the full extent of demand for CSB, notwith- 13. This could be the number of CSBs a year in an standing wider demand for it beyond serviced plots unconstrained new build supply situation – for ex- (for those councils making the correct distinction).

Table 1: Individuals on Right to Build Register for CSB, 2016-2020, England

3 45,084 individuals and 580 groups. https://www.gov.uk/government/publications/self-build-and-custom-housebuilding-data-2016-2016-17-2017-18-and-2018-19 4 NaCSBA Right to Build Freedom of Information request: Analysis of local authority activity around the Right to Build registers, at 30 Oct 2019 https://selfbuildportal.org.uk/news/freedom-of-inf/ 17. The frst is that 31 per cent of councils now CSB homes built each year. Neither MHCLG nor impose some restrictions on joining their Register the ONS publish statistics on CSB housing com- (26 per cent in the previous year). 30 per cent ap- pletions or net additions. Our best estimate is that ply local connection tests (24 per cent) and 15 per CSB currently makes up around 5 per cent of hous- cent apply charges (12 per cent). 4 ing completions each year. This is broadly in line with earlier reports, e.g. Lloyds (2013) suggested a 18. Further, not all of those wishing to CSB are range up to 9,000 homes annually with reference aware of the Register, indeed the NaCSBA VAT Re- to Calcutt (2007), Ball (2011), Griffths (2011), and covery Survey suggests only 42% of the respondent suggests that CSB has not grown signifcantly over custom self-builders are. Broader survey evidence the last ten years or so. 6 suggests a very high proportion of the general public – between 83 and 87 per cent – is unaware of it, 22. There are four broad CSB supply indicators: according to the YouGov polling for NaCSBA. 5 AMA Research estimates for self-custom build completions; HMRC VAT Refunds for DIY House- 19. For these reasons it seems very likely that builders; CIL exemptions; and planning permis- annual CSB demand is signifcantly higher than sions data. An attempt was made to collate war- 16,000 per annum. It may also be that the Register ranty data from CSB warranty providers, but the captures only predominately the self-build part of fgures were low implying incomplete coverage. the wider CSB market. Some of the providers covering the whole market were unable to provide a CSB breakdown. 20. All things considered, it seems likely that true demand for CSB in England is at least 30,000 a year, AMA Research as a minimum, and could conceivably be as high as 23. AMA Research has estimated ‘self-build’ com- 100,000 homes a year. This is also refective of the pletions of around 15,000 in 2019 in the UK. 7 The general population survey evidence and would also research defnes ‘self-build’ as any housing built by be more in line with what occurs in other devel- individuals or groups or individuals for their own oped economies across the world which suggests use, so is likely to largely include custom build. demand as high as 120,000 homes a year. True The estimates are based on VAT returns but it was demand is taken to mean underlying (including la- not possible to ascertain the precise methodology. tent) demand that refects the public’s preferences but cannot be realised due to structural obstacles. 24. The fgure of 15,000 compares to 250,000 new build completions and perhaps 300,000 overall SUPPLY net additions in the UK. This suggests CSB is no 21. There are no reliable data for the number of more than 5-6 per cent of new build supply.

Table 2: AMA research estimates of 'self-build' completions, 2015-2019, UK

5 https://nacsba.org.uk/news/1-in-3-adults-interested-in-self-building/ 6 “Build-it-yourself? Understanding the changing landscape of the UK self-build market”, Wallace et al, Centre for Housing Policy (University of York) for Lloyds Banking Group, 2013 “Te Calcutt Review of Housebuilding Delivery”, Calcutt, Department of Communities and Local Government, 2007 “European Housing Review” Ball, Royal Institute of Chartered Surveyors, 2011. “We Must Fix It: Delivering reform of the building sector to meet the UK’s housing and economic challenges”, Grifths, Institute of Public Policy Research, 2011 7 the last full year pre-pandemic. “Self Build Housing Market Report - UK 2018-2022”, 7th Edition, AMA Research

71 Table 3: HMRC VAT refunds & Na CSBA estimates of CBS, 2014/15 - 2018/19, UK

HMRC VAT Refunds London Legacy Development Corporation), a number 25. NaCSBA has estimated that there were around that has been rising in recent years.10 It suggests 13,210 self-build completions in 2018/19 in the around half of English Local Planning Authorities, UK, including 10,912 in England.8 However the VAT out of a total of 327 (in 2019), are charging it. refund data are for claims received and it is observed that around 20% do not result in a refund, 30. NaCSBA’s annual FoI request to local authori- suggesting these fgures could be an overesti- ties includes a question about the number of self- mate. The HMRC VAT Refund for DIY housebuilders build exemptions that were granted in their area. data indicates custom self-build has been rising 115 local authorities have provided a response moderately over the last 5 years, but only if we over the last four years. During that time, these assume a relatively constant share of people councils had an average of 80 exemptions each claiming it: over the four-year period, the aggregate total across all the councils was 9,108 exemptions over 26. The NaCSBA estimate is based on HMRC data the period and 2,302 a year on average. on VAT refunds for DIY homebuilders and the NaCSBA VAT Survey (2019) which found from a 31. Pro-rating this annual average to the 327 sample of 300 that 51.1% of self-builders use the English Local Planning authorities – i.e. assuming DIY Homebuilding Scheme to recover VAT.9 Look- they would have the same level of CIL exemptions ing at earlier VAT surveys the share claiming the for self-build if they charged it – implies only VAT refund has been fairly constant over the years around 6,500 self-builds in England a year. with 50.3% using the Scheme in 2016. New build planning permissions 27. The 13,210 number is reasonably close, albeit 32. Data obtained from Glenigan provides the total slightly shy of, the AMA Research fgure for 2018 number of planning permissions by site size – with of 14,100 (again, both are UK and VAT-based). VAT- 1&2 unit sites providing a frst-order proxy for based estimates are DIY builds and so more likely ‘self-build’. to exclude some custom build. However, the VAT- based data can still be treated as approximating 33. Approvals are recorded at the detailed planning to a whole of market view. stage. Where a project has secured outline planning approval and the detailed consent is being resolved 28. This latest number also compares favour- through the approval of reserve matters the date ably to the mid to late 2000s (prior to the fnan- of ‘detailed consent’ is deemed to be that of the ap- cial crash) when there were consistently around proval of reserve matters. In the case of some proj- 10,000 self-build completions a year in the UK ects, the reserve matters are approved piecemeal; in judged by this metric. these circumstances the earliest approval date has been used in order to avoid double counting. CIL Exemptions 29. The Community Infrastracture Levy (CIL) applies 34. Figures collated by Future, the company behind in England and Wales, where each local authority Homebuilding & Renovating magazine are some- can choose whether to charge it or not. Selfbuild what higher: single dwelling permissions, including homes are exempt from the CIL charge. 160 English conversions, of around 15,000 annually for the UK Local Planning Authorities charged CIL as at 1 Oc- and 12,000 for England (average 2016-2019).11 tober 2019 (excluding the London Mayoral CIL and

8 NaCSBA Custom and Self Build VAT Recovery Survey 2019: VAT Reclaims as a source of number of Self Builds 9 NaCSBA Custom and Self Build VAT Recovery Surveys (2016) and (2019): VAT Reclaims as a source of number of Self Builds 10 https://www.planningresource.co.uk/article/1121218/cil-watch-whos-charging-what Table 4: Glenigan approvals data, number of units by project size, 2015-2020, England and GB

35. The above Glenigan fgures are based on a monitoring fgures alongside 1&2 unit approvals defnition used by the Home Builders Federation recorded by Glenigan (HBF defnition and an alter- (in their quarterly new housing pipeline reports), native measure). and may under-state smaller sites (particularly conversions).12 Alternative fgures provided by 38. The planning datasets provide a broad picture, Glenigan, based on different criteria, show 1&2 but each with strengths and weaknesses such as unit approvals of around 13,500 annually for En- 1&2 unit approvals excluding CSB plots on larger gland (four year average to October 2020). An es- sites, and a proportion of 1&2 unit sites being de- timated 9,500 being single dwelling permissions, veloper-led (speculative) rather than customer led. so closer to the Future fgure. 39. Regarding the frst issue we asked Glenigan 36. Other permissions data is reported to MHCLG. to conduct a fltered search of their data to pick The data shows 10,134 approvals in the year ending up sites where project descriptions included cer- October 2019, with 28,009 cumulatively granted tain key words, including “Self-build” and “Cus- over three years (close to 10,000 a year on average). tom-build”.13 562 projects were identifed in En- Local authorities are asked to report the number gland, where a planning application had been of serviced plots – but in practice many councils submitted and/or decided in the period 2017Q1 to appear to be counting a wider range of sites. 2021Q2, for sites of 3+ units. These projects include a total 17,945 units, of which 4,512 are CSB units. 37. Table 5 shows the MHCLG Right to Build (RtB) Table 5: MHCLG RtB monitoring and Glenigan 1&2 unit approvals, number of plots/units, 2017-2020 England

11 www.futureplc.com Data made available via NaCSBA 12 https://www.hbf.co.uk/policy/policy-and-wider-work-program/new-housing-pipeline/ 13 Full list of search terms: “Self-build”, “Self build”, “Custom-build”, “Custom build”, “Custom”, “Serviced plot”, “Serviced plots”

73 Table 6: Filtered sites (based on CSB key terms), project units, 2017 Q1 - 2021Q2, England

40. There were a total of 1,538 CSB units ap- 42. The planning-based estimates suggest annual proved over 4.5 years – an annual average of 342 CSB completions of 9,000 to 11,500 in England – units. Excluding outlines the average is 188 CSB the upper end being broadly consistent with the units on sites of 3+ units. A caveat however is UK-wide AMA Research and HMRC VAT estimates that the data is likely to underestimate the true (in relation to total average completions in the numbers. We are aware of some larger schemes period 2017-2019). permissioned before 2017 and others that do not explicitly mention any of the search words. Grav- The demand-supply imbalance en Hill for example is not picked up. An outline 43. Annual CSB supply of around 10,000 in En- permission for the 1,900 unit site was granted gland is far less than the estimated demand for pre-2017 and reserve matters within the sample CSB of 30,000 to 100,000. The shortfall is be- timeframe do not mention any of the key terms. tween 20,000 and 90,000 annually. This can be viewed in the context of overall housing supply. 41. CSB permissions on sites of 3+units are unlike- There were an estimated 243,770 net additional ly to be much more than 500 annually. All told we homes in England in 2019/20 (3-year average estimate a range of permissions and associated 236,000). This means a gap of around 60,000 on completions estimates as follows: the Government’s target of 300,000.

Table 7: Approvals-based estimate of CSB completions, England

14 Based on a sample of CSB sites obtained from Glenigan 44. Any increase in CSB beyond 60,000 would ful- standardised products. Since then, many sectors ly displace other forms of supply assuming need have moved away from pure standardisation is capped at 300,000. Below this, the level of ad- (“you can have any colour as long as its black”) in ditionality depends on a number of factors includ- response to consumer demand and taking advan- ing land constraints – explored further in the net tage of technological advances. additionality section. 47. The table below shows a range of business CUSTOMISATION VERSUS strategies suggested by Lampel and Mintzberg STANDARDISATION (1996).15 The continuum is based on four stages 46. The early 20th Century saw industry become of the value chain: design, fabrication, assembly, dominated by the (Fordist) mass production of distribution.

Figure 1: Business strategies

Sources: Lampel and Mintzberg (1996), Barlow et al (2003), Santos Hentschke et al (2020)16

15 “Customizing Customization”, Lampel and Mintzberg, MITSloan Management Review, 1996

75 Economic forces misation – and to minimise the trade-off between 48. Economies of scale. Product standardisation al- effciency and choice. Mass customisation has lows companies to produce at high volumes for been defned as: "producing goods and services to the mass market – driving down unit costs. This meet individual customer's needs with near mass does however mean products refect the aggre- production effciency". [Tseng & Jiao, 2001]17 gate rather than individual need. • Product variation can improve companies’ com- 49. Economies of scope. The growth in market size petitive advantage and support effcient capacity associated with globalisation has enabled many utilisation. industries to combine the benefts of mass pro- • The further move to mass customisation may duction with greater product diversifcation. Prod- involve some trade-off between the effciency of ucts refect the aggregate of need in market seg- mass production and consumer choice. ments rather than individual need. • However, technological change has allowed companies to mass produce a variety of models or 50. In many industries, the pressures of competi- variations of standard models at little extra cost. A tion have forced companies to adopt mass custo- fully automated production facility does not need

Figure 2: Effciency/consumer choice trade-off

16 “Customizing Customization”, Lampel and Mintzberg, MITSloan Management Review, 1996 “Choice and delivery in housebuilding: lessons from Japan for UK housebuilders”, Barlow et al, Building Research and Information, 2003 “A Customer Integration Framework for the Development of Mass Customised Housing Projects”, Santos Hentschke et al, Sustainability, 2020 17 “Mass Customization”, Tseng & Jiao, chapter 25, Handbook of Industrial Engineering: Technology and Operations Management, 2001 to be “re-tooled” every time there is a change, as actually want – and this is part of the reason was the case for early production lines. households spend an estimated £22bn on home • Providing greater choice does mean companies improvements each year. can seek to extract more consumer surplus. In other words, they can seek to charge a higher price 54. The UK housing market is at odds with senti- – refecting consumers’ willingness to pay – as a ment and general market trends. A recent Deloitte balance to any loss in effciency. report found that, on average, 36 per cent of con- •The degree of personalisation in the economy is sumers expressed an interest in purchasing per- anticipated to increase as part of so-called Indus- sonalised products or services. [Deloitte] 19 try 4.0 – beyond mass customisation – enabled by technology providing new forms of interaction 55. Product modularity (or modular architecture) between customers and frms. The risk is that UK is often cited as one of the key elements of mass housebuilding falls even further behind the curve customisation – helping to minimise the trade-off of economic progress. between effciency and choice.

Read-across to UK housebuilding “The mixing and matching of modules in different 51. UK housebuilding falls into two main catego- combinations leads to high product variety, whereas ries: segmented standardisation (the majority of high volume is achieved by using a limited number new supply provided by the major housebuilders) of modules across a large number of product vari- and pure customisation (the relatively small self- ants”. [Rocha et al (2015)] 20 build market). This polarisation suggests there is a missing middle. “[T]he primary objective in mass customization can be summarized as to achieve fexibility as well as 52. This is surprising. Whilst many of the products effciency in manufacturing. For such purpose, the we consume are standardised, higher value prod- key solution was in modular, generic product archi- ucts tend to be supplied to market with a higher tecture.” [Kabasakal et al (2017)] 21 degree of personalisation. The car market, once about mass production, is now centred on mass 56. This is at odds with the major UK housebuild- customisation (Kabasakal et al, 2017).18 ers’ supply chain strategies and high degree of on- site assembly – and raises the question whether 53. With UK housing the general picture is that custom housebuilding can be aligned with efforts people must take what they’re given – with loca- to drive up the use of Modern Methods of Con- tion being a key consideration and housing choic- struction (MMC). As covered later in this chapter es constrained by the existing stock, or a relatively – countries with high levels of customisation are small and relatively homogenised new supply of often associated with high levels of MMC such as the major housebuilders. A signifcant proportion in Germany. of the population won’t even consider buying a new home, according to survey evidence. Yet the existing stock often falls short of what people

18 “From mass customization to product personalization in automotive industry: potentials of industry 4.0”, Kabasakal et al, Pressacademia, 2017 19 “Made-to-order: the rise of mass personalisation”, Deloitte, Te Deloitte Consumer Review, 11th edition, 2015/16 20 “Adopting Product Modularity in House Building to Support Mass Customisation”, Rocha et al, Sustainability, 2015 21 “From mass customization to product personalization in automotive industry: potentials of industry 4.0”, Kabasakal et al, Pressacademia, 2017

77 Figure 3: Effciency/choice trade-off - feasibility space

57. Any increase in the cost of production (asso- 60. As already noted, the levels of production ef- ciated with more consumer choice) needs to be fciency needed to deliver cost-effective customi- balanced against other factors – lower proft, land sation may be linked to the adoption of Modern value, or higher price (linked to willingness to pay). Methods of Construction – with implications for In the diagram, the upper bound of willingness to housebuilders’ supply chain strategies. But even pay is depicted by the diagonal dotted line. with greater adoption of MMC, it is debatable whether UK housebuilders will deliver customis- 58. It’s obvious that housebuilders would not vol- ation to the same degree as other industries such unteer a reduction in profts. The proft margin as car manufacturing without facing much great- can only be avoided by circumventing mainstream er competition. housebuilders (self-build). The alternative is to drive down the proft requirement – linked to the 61. In other industries, such as the car market, the risk profle of investment (proft margin refects move to mass customisation occurred in response the cost of capital including industry risk). The to ferce global competition – which forced manu- ability to pass on additional costs to landowners facturers to look beyond the provision of standard, is constrained by a highly competitive land mar- low cost products, to better meet the needs and ket. However, a higher degree of personalisation desires of customers. [Alford et al (2000)]22 is often possible on smaller sites not in demand from the major housebuilders but not constrained 62. By contrast, the UK housebuilding market is by land viability. not exposed to international, or even national competition. Housing markets are very localised 59. Aside from fexibility in proft and land price, and the structure of the industry, which is built the potential for customisation therefore comes around land scarcity, means housebuilders com- down to consumers’ willingness to pay in combi- pete in the land rather than product market. nation with production effciency (which deter- mines the possible supply price). This is because Whether UK housebuilders will move towards in- housebuilding involves a high degree of on-site creased customisation is, however, unclear. Perhaps assembly – meaning additional choice has time- the foremost inhibitors in a market dominated by cost implications. speculative production are the land-oriented devel-

22 “Mass customisation — An automotive perspective”, Alford et al, International Journal of Production Economics, 2000 23 “Choice and delivery in housebuilding: lessons from Japan for UK housebuilders”, Barlow et al, Building Research and Information, 2003 opment process and the lack of competition from INTERNATIONAL COMPARISONS alternative supply sources. The dominant competi- 64. Again, the level of CSB provision in the UK is ex- tive strategy of the UK’s speculative housebuilding ceptionally low by international standards, given it industry has been driven by the ability to beneft is likely to be around 5 per cent of new supply. The from profts accruing from land development. Hous- chart below shows estimates for a range of coun- ing sales’ prices are derived from what the market tries – including new estimates produced for this will bear, based on the cost of production and land, study and earlier estimates produced by the Right together with expected profts. In contrast, producers to Build Task Force. There are some differences be- in other competitive consumer goods industries are tween the two sets of estimates – largely due to forced to innovate to reduce production costs below different timeframes (see annex for further details). sales prices in order to achieve proftability and also However, both sets of fgures broadly confrm the to develop new products to differentiate themselves rankings and the UK languishing behind. in the market. [Barlow et al (2003)] 23

63. However, there is scope for growth – with levels of customised housing delivery much higher in other countries, and lessons for the UK.

Figure 4: International comparison of self-provided/commissioned build as % of new housebuilding

79 65. Globalisation has had very little impact on the Netherlands housebuilding industry. This is because there’s • In contrast to countries such as Germany self/ often signifcant state involvement in the pro- custom housing declined signifcantly in the cess and detailed and complex regulation of land. Netherlands. These interventions and regulations are particular • The 2001 Dutch National Housing Report stat- to each country. For example, neither housing nor ed a third of Dutch housing production should be planning has ever been within the remit of the self-build by 2040 (at the time the percentage was transnational EU. around 15 per cent). The Netherlands remains at the lower end of European countries – at around 66. To understand the differences in custom and 15 per cent. self-build output you have to understand the • However, progress has been made in some parts differences in how the housebuilding industry is of the country. Almere is a well-known example of structured and regulated. These differences were large-scale self-build. explored in detail earlier in Chapter 5 "Learning • Like many European countries land development from Overseas", but some of the key points are as is a state-led activity. Municipalities will designate follows: an area for development, buy the land and produce a masterplan and put in infrastructure and then Japan sell plots, blocks or city zones to developers. • One of the largest new housing markets in the • In theory this should allow municipalities to de- world. liver the self-build target – but in practice there • Availability of large sites is severely constrained. are constraints. The original land owner – often • Notably unusual for the short life of its housing a developer – has right of frst refusal buying (20-30 years, though this is changing), with indi- back plots. There are fnance barriers to self-build viduals ‘recycling’ their plots back onto the mar- which limits demand and municipalities need ket and a large proportion of new build commis- to balance the need for institutional affordable sioned by individuals. housing and the need to fnance the development • 75 per cent of newly build detached houses are with a commitment to self-build. commissioned by individuals and built on their Sources: Lloyd et al (2015) 25 own plot of land. This means housing suppliers do not proft from trading in the land market. Germany • The remaining 25 per cent of new houses – and • The German housing market is characterised by the bulk of the market for new apartments – are very high levels of self-provided housing (55%) built speculatively for sale. but also low levels of home ownership (around • In terms of the 75 per cent, these are delivered 50%, compared to over 60% in UK – rooted in by either (1) smaller, local housing suppliers (2) massive state sponsored investment in the private larger regional or national suppliers using facto- rented sector in the 1950s). ry-based systems. Housing suppliers concentrate • German planning is frmly rules-based with legal their competitive strategies on production, cus- rights to build in areas zoned for housing which tomer service and choice. signifcantly reduces the risks for self-providers. • Examples: Toyota Homes; Sekisui Heim; Sekisui House. Municipalities produce preparatory land use plans Sources: Barlow et al (2003)24 , Wikipedia (Flächenutzungsplan) which sets out the vision and zone designations and the binding urban land

24 “Choice and delivery in housebuilding: lessons from Japan for UK housebuilders”, Barlow et al, Building Research and Information, 2003 25 “Self-build in the UK and Netherlands: mainstreaming self-development to address housing shortages?”, Lloyd et al, Urban, Planning and Transport Research, 2015 use plan (Bebauungsplan) which contains binding • The SME builder sector is signifcant in France, designations for all developments. partly because self-commissioned homes remain • Land readjustment is a normal part of the pro- a large part of the market but Ball (2003) suggests cess, in effect the municipality pooling the land that the sector is supported by strict labour laws and preparing it for development. This allows the that apply to larger builders. municipality to control the form of development, Sources: Ball (2003)28 recoup the costs of servicing and infrastructure and possibly to receive some of the uplift in land USA value, as well as to remove delays caused by a lack • The US is similar to the UK in that housebuild- of infrastructure. ing is almost wholly a private sector activity, apart • Labour laws also have an impact in Germany with from some very targeted social housing develop- restrictions on subcontracting by large construc- ment in urban areas. tion frms which means that there remains a sig- • The planning regime varies signifcantly across nifcant SME building sector that in turn supplies the country because it is a state matter – and in the signifcant demand for customised homes. many cases devolved to the very local level. How- • Hamiduddin 2015 found that group building ever nearly everywhere operates a zoning system (and by implication self-building) has fourished with greater or lesser levels of regulation (Califor- because the power of speculative providers (espe- nia notoriously strict, Texas notoriously fexible). cially over the land market) is curtailed and effec- • Unlike the UK there is a signifcant private sec- tive municipal control of land allows the provision tor land development industry supplying serviced, of infrastructure, freezing of land prices and dis- permissioned plots to volume housebuilders. posal through competitive bidding (not just based • The US developed the mass production of stan- on price). dardised suburban housing (Levitown), now there Sources: [Hamiduddin & Gallent (2015)26 , Monk et is signifcant consumer pressure to produce more al (2013)27 differentiated products but while there are various models on offer with ftting-out options, many France probably do not meet the defnition of “customised”. • Rates of home ownership are similar to the UK. • That said there is a signifcant CSB sector which • Planning is mainly in the hands of Communes refects the availability of land, an industry that or groups of Communes (2,500 of them) or the produces serviced plots and a planning regime Metropole for larger cities. It is broadly a zoning that in many areas is relatively liberal. system but with some discretion to make deci- Sources: Moore & Adams (2012)29 sions within designations. • Signifcant effort is put into land assembly by Factors relevant to greater municipalities and communes which is seen aa personalisation in the UK a key part of the planning system. Much of this 67. You can't transfer housebuilding models from is done on a voluntary basis but there are state one part of the world to another, as so much de- agencies with powers to buy and sell land (includ- pends on individual histories and cultures, as well ing Compulsory Purchase Order) and collect taxes as the role of the state and regulatory and fnan- on development value and payroll - hypothecated cial regimes. However, there are two areas relevant to fund infrastructure. to CSB where the UK is signifcantly different:

26 “Self-build communities: the rationale and experiences of group-build (Baugruppen) housing development in Germany”, Hamiduddin & Gallent, Housing Studies, 2015 27 “International review of land supply and planning systems”, Monk et al, Joseph Rowntree Foundation, 2013 28 “Markets and the Structure of the Housebuilding Industry: An International Perspective”, M. Ball, Urban Studies, 2003 29 “House building industries: Western Europe and North America”, Moore & Adams, International Encyclopedia of Housing and Home, 2012

81 68. Land Assembly / infrastructure – in nearly all Australia and 15% in the USA while France and countries there exists a distinct function we could Germany have signifcant self-commission sec- call land development or land assembly. In Europe tors dominated by SME builders. In part this may this is largely a public sector function; in the US refect the tight geography of the UK, but it also there are private land development companies. In fows from the complex and uncertain planning both cases the output is the provision of serviced system which inherently benefts large frms who plots with permission to build available for sale are better equipped to deal with these issues. to both individuals and housebuilders. These serviced plots make up a signifcant percentage of 73. Long development timescales and regulato- the land available for housing. ry complexity (and planning uncertainty) favours larger speculative frms with easy access to capi- 69. Planning – the planning system in almost ev- tal, because it allows them to navigate the system ery country is based on zoning which allows the better than smaller frms and this in turn leads to owner of zoned land to build whatever is permit- them capturing more land and to the exclusion of ted by the rules. There are different levels of fex- new entrants. To be clear, this is not anti-compet- ibility in different regimes, though essentially you itive behaviour on the part of speculative house- have a right to build whatever is permitted by the builders, but rather the result of the system and zoning regulations. their rational response to it.

CHALLENGES TO CSB GROWTH 74. This is also refected in the long history of mergers and takeovers which have been justifed The ‘Speculative’ housebuilding model in the UK as a quick way of increasing individual frms' land 70. As set out in the previous section, the UK has a pipeline [Ball 2013] to further help them man- different approach to both land and planning which age risk and ensure a steady and secure supply presents challenges to custom and self-building. of land. This concentration is important because it more frmly embeds the speculative housebuild- 71. The term ‘speculative’ is used to describe housing model over time – to the exclusion of other ing delivery in the UK because housebuilders pur- models, including frms offering a more custom- chase the land, conceive the housing scheme, ob- ised product or frms offering serviced plots. This tain planning, and do most or all of the building is manifested in an increasing number of planning work, before there is any contact with the purchas- permissions on large sites, as shown in Figure 5. er.30 There are a few key points about the dominant UK model which both distinguishes it from the ap- 75. The barrier to new entrants is important be- proach used in other countries and also explains cause it illustrates how hard it is for SMEs or in- why custom and self-build is so small in the UK. dividuals - who do not have easy access to capital, access to land, or the ability to wait years for a site 72. The UK housebuilding industry is very con- to go through planning, or the expertise and re- centrated relative to other countries. The top 10 sources to push it through – to deliver the levels of frms control 44% of output compared to 14% in custom and self-build that the public want to see.

30 “British Housebuilders: History and Analysis”, Wellings, 2006 Figure 5: Share of planning permissions on large sites, 2010/11-2019/20, England

83 The UK housebuilder model and preparing the land for building homes (clear- is vertically integrated ing, landscaping, putting in roads, utilities etc), in- 76.The process of building houses could be con- cluding the provision of fully-serviced plots. ceived as two distinct businesses – and as noted Construction and sales - building the homes, mar- above in many countries they are done by very dif- keting them for sale, selling them and aftersales ferent organisations. services. Table 8 sets out the UK process stages 1 Land development – buying land (speculatively to 3 are Land Development and stage 4 and 5 is or administratively), getting planning permission Construction and Sales.

Table 8 : Main stages of the housebuilding process

Sources: ChamberlainWalker / Barratt (2017)31

31 “Te Role of Land Pipelines in the UK Housebuilding Process”, ChamberlainWalker Economics for Barratt, 2017 32 “An Analysis of Self-Build and Custom Housebuilding in the South West of England”, Gingell & Shahab, Urban Science, 2021 77. There are good reasons why elsewhere in the 80. Minimal involvement by public bodies in land. world these two businesses are often separated. Since the demise of New Town Corporations, direct, First of all, land development is a high risk, capital active public sector involvement in land develop- intensive and long-term business. In countries like ment in the UK has been very rare. Even major the USA where private capital is used, specialist government-sponsored initiatives like Eco-towns, land developers require high levels of return to Ebbsfeet Garden City and Garden Villages have balance the risk and many operators are private left responsibility for land development to the pri- (rather than public) companies because they can vate sector. Master planning of large sites by lo- work over a longer timescale to get a return. In cal planning authorities is not land development, much of Europe land assembly is performed by because without ownership they lack control over public bodies because it is seen as part of the wid- what happens to the site. The very few examples er planning system. It gives municipalities greater of large-scale custom build in the UK are being control over what gets built when, and they can driven by the public sector. The largest is Graven manage land speculation and land prices. Hill, purchased from the MOD by Cherwell District Council who then produced plots for sale to cus- 78. If the high risk, speculative part of the process tom and self-builders (Graven Hill). is delivered by others then the core business of building and selling houses can be done by more 81. Private land development producing serviced specialist construction / sales companies or indi- plots is minimal. As noted above, many house- viduals who buy up ready-to-use building plots, builders run their own in-house land development turning them around as quickly as possible on businesses. There is a signifcant land promotion much narrower margins (commensurate with the industry that works with landowners on a con- lower risks). sultancy or partnership basis to get land through the planning system. There are a small number of Why are these two businesses land development frms (such as Urban & Civic integrated in the UK? and Gallagher) that operate as principal (i.e. the 79. A rational response by housebuilders to en- landowner). However, both these frms and the sure a land supply. UK housebuilders bring the land promoters are largely aiming to supply the land and construction businesses together as a major housebuilders rather than individuals who rational response to land scarcity and uncertainty want to build or commission their own home. of permissioned supply through the current planning system. To survive, housebuilders must be 82. This means that there is no large-scale market expert in acquiring land at the right price and in in serviced permissioned building plots because the right places. Ensuring a pipeline of future land so much land is dominated by major housebuild- supply – a fundamental factor of production – is ers, irrespective of whether it has come from in- vital. This is why all the major housebuilders have house land development, specialist land develop- sizeable land banks and are active in the business ers or landowners working with land promoters. of bringing land forward through the planning system. This means specialist builders, SMEs and Speculative housebuilders produce individuals only have access to smaller marginal standardised products sites, thus limiting the scope for growth in the 83. UK housebuilding is dominated by large ver- custom and self-build sector.32 tically integrated housebuilding companies which produce relatively standard products. While some

33 “How does the land supply system afect the business of UK speculative housebuilding?”, Payne et al, UK Collabora- tive Centre for Housing Evidence (CaCHE), 2019

85 of this may be down to culture, the chief reason is detailed, expensive proposals need to be drawn the business model and the regulatory regime (i.e. up. Even ‘outline‘ permission is expensive and not planning) (see for example Payne et al, 2019).33 a guarantee that full permission will be agreed. The small number of large companies inevitably In contrast, planning systems based around zon- limits the variety of different designs and prod- ing contain a set of rules outlining what one is ucts on offer. allowed to build, so a zoning designation requires no detailed plans. This allows plots to be sold with 84. As already noted, the speculative business a legal guarantee that building (within the rules) model prizes success in the land market – which is will be allowed (see for example Ball, 2013).34 The the focus for competition, rather than the product difference between these two approaches is at market. Indeed, as a result of the speculative model, the heart of the government’s proposed planning huge investments in land and building are needed reforms (White Paper Planning for the Future, Au- up front – meaning a high level of risk. This severe- gust 2020). ly limits the incentive for product innovation. Table 9 sets out the key reasons why the specula- 85. Companies put together development propos- tive housebuilding model and the planning system als – including unit size, mix etc – based on local in the UK discourages custom and self-build. Crit- knowledge and evidence of the potential demand ically, the current volume housebuilding model in different market segments. Within these seg- and the planning system are currently trapped in ments housing designs are highly standardised a vicious cycle, where the business model arises as and the assumptions used are baked into the land a direct result of frms responding to constraints in price, making it very hard to change at a later date. the planning system. With the right planning environment it would be quite possible to separate The Planning System land development from the construction of homes, 86. The UK planning system is almost unique in thus signifcantly lowering barriers to entry and in- that – while it is in theory a “plan led” system creasing consumer choice. based on precedents and both local and national policies – in practice each planning application ADDITIONALITY OF CUSTOM is decided on a case by case basis – particularly AND SELF-BUILD anomalous given that the product has many of the 88. CSB contributes to overall housing supply – different characteristics of a commodity - and thus currently an estimated c. 10,000 homes in England always carries a signifcant element of risk, even annually. The ambition is to scale this up in a way if the risk is around cost and delay rather than the that improves overall housing supply – support- ultimate outcome. Because of these uncertainties, ing the Government’s ambition to deliver 300,000 big risks remain with housebuilders right up to new homes a year by the mid-2020s – rather than the clearance of the last condition. There is thus at the expense of other forms of housing supply a big incentive to avoid innovation and stick to that would otherwise have been built. standard products that have a track record of success at the local planning committee. 89. Scaling up CSB will produce the most beneft where it is fully ‘net additional’ to other sourc- 87. More particular to custom and self-build, the es of new housing supply i.e. where it is flling a UK planning system also makes running a private missing market in new build housing. A number of land development business selling serviced plots factors can affect the level of additionality, acting harder because planning permission is close- on the demand and supply sides of the new build ly linked to what is actually built, meaning that housing market.

34 “Spatial regulation and international diferences in the housebuilding industries”, M. Ball, Journal of Property Research, 2013 Table 9: Factors affecting growth in the UK’s CSB sector

87 Demand 90. When a person or a household buys a new 92. If the new build market has a lot of choice home, they are choosing between different prod- with many different products (supply is heteroge- ucts. This includes the choice between a ‘second nous), then the degree of substitutability between hand’ home (i.e. one from the existing stock of new build homes will be much lower. In this in- housing that has been lived in previously) and stance, policy support favouring new build home a new build home. In today’s housing market, type A would have less impact on the demand for around 10% of people or households buying a home type B, meaning a low level of displacement. home choose to buy a new build one, whereas 90% choose a second-hand home.35 93. In the context of CSB, therefore, the question is how different CSB homes are to other kinds of new 91. If the new build market has little choice and build. If we take the view that CSB homes are very the products are similar (supply is homogenous), it different to standard types, then displacement is far means one new build home is highly substitutable less likely. The further implication is that a heteroge- for any other new build home, of a size and type neous new build market with its greater choice will (e.g. house/fat), within a given local market. In be bigger than the homogenous new build market, this scenario, policy support for one type of prod- because it satisfes a wider range of consumer pref- uct over another would likely be almost wholly at erences. In other words, a homogenous new build the expense of that other part, meaning a high market is more likely to feature a missing market (or level of displacement. markets) than a heterogeneous one.

35 Land Registry 94. A number of pieces of evidence suggest the UK 97. The reasons for standardisation in mainstream has a relatively homogeneous new build market at housebuilding were considered in more detail above present, but that growth in CSB provision could help – the fundamental driver is that planning and land to address this by diversifying supply – so adding to, constraints lead to a dominant ‘speculative’ house- rather than displacing, mainstream housing supply. building model. Speculative housebuilding involves housebuilders acquiring land and securing planning 95. Sir Oliver Letwin concluded that the homogene- on the basis of potential demand in different market ity of types and tenures of the homes on offer, and segments. This means housing designs are ‘baked in’ the limits on the rate at which the market will ab- to the land price and planning approval, making it sorb such homogenous products, are fundamental extremely diffcult to respond to specifc customer drivers of the slow rate of build-out on large sites preferences at a later date. By contrast, self-builders in England.36 Letwin recommended planning policy can infuence every detail of their project – within should set out diversifcation principles – and listed certain constraints including planning – because self and custom-build as one of the ways to achieve projects are demand-led from the outset. diversifcation on large housing sites. 98. Pure standardisation and pure customisation 96. Payne et al (2019) provide evidence of a culture (fully bespoke) are the two extremes – with, broad- of standardisation in the delivery of new housing.37 ly speaking, volume builders at one extreme and They refer to a study by Nicol and Hooper (1999), self-builders at the other. There is little if any sub- which showed standard house types were widely uti- stitutability between the two. There is a spectrum – lised by both the largest housebuilders and a signif- with substitutability and the potential for displace- icant number of smaller housebuilders.38 Payne et al ment being higher where “CSB provision” is much also refer to this and other studies showing that cus- closer to what is offered by mainstream housebuild- tomisation is often restricted to internal non-struc- ers, although it is widely accepted that this is not tural features. The situation does not appear to have custom-build in the true sense. changed much over the last twenty years.

Figure 6. Substitutability and the degree of customisation

36“Independent review of build out: fnal report”, Letwin, MCHLG and HM Treasury, 2018 https://www.gov.uk/government/publications/independent-review-of-build-out-fnal-report 37“How does the land supply system afect the business of UK speculative housebuilding?”, Payne et al, UK Collabora- tive Centre for Housing Evidence (CaCHE), 2019 38“How does the land supply system afect the business of UK speculative housebuilding?”, Payne et al, UK Collabora- tive Centre for Housing Evidence (CaCHE), 1999

89 99. Again, looking at consumer preferences, 1 in 3 55, 46% were unlikely to consider buying a new people are interested in building their own home build home, rising to 51% of those aged 56-65 at some point in the future, including 12% who and 50% of those aged 66 and over. In a separate say they are ‘very interested’.39 The proportion is survey, the Homebuilders’ Federation found that signifcantly higher amongst younger people – 33% of those surveyed would be likely to consider with nearly half of respondents (48%) interested buying a new build home. 43 in building their own home, while amongst those aged 55+ the fgure was lower at 18%. Some 74% 101. According to Zoopla’s 2018 homebuyers of respondents cited “being able to build a home survey, almost exactly the same amount of peo- to my exact specifcations” as the main bene- ple prefer new builds as existing homes (around ft. Research by Nationwide Building Society has each 37%) whilst a signifcant proportion show no indicated even higher potential demand: a 2014 preference.44 37% cited being able to choose their survey found that 53% cent of people would like own colours and fnishes as a beneft to new build, to build or commission a house to their own de- but the same proportion cited “they’re too uniform sign at some point in their lives; and in 2018 this and samey” as a disadvantage. had risen to 61% (both surveys by IPSOS MORI).40 Demand was higher still among the young. Some 102. Another survey, also in 2018, found a much 83% of 18 to 24-year-olds were interested in smaller proportion of homebuyers preferring new commissioning their own dwelling, as were 83% builds.45 82% of respondents said that, given the of those actively looking at getting on the prop- choice, they would rather invest in a period home erty ladder. than a brand new one.

100. In the British Social Attitudes (BSA) 2018 103. The proportion willing to buy a standard new survey, more people (42%) reported they were un- build home is much lower amongst the subset of likely to consider buying a new build home (42%) people interested in CSB housing – as compared than reported they were likely to consider buying to the general population or homebuyers in gen- a new build home (39%).41 Similarly, more people eral. An NSBRC survey for the Bacon Review found reported that they were very unlikely to consider only 6% would buy a new build if they weren’t buying a new build home (27%) than very likely able to self or custom build; 46% would stay put (19%).42 Older people were most unlikely to con- and 48% would buy a second-hand home. Being sider buying a new build home. Of those aged 46- able to build a home to their exact specifcations

39 https://nacsba.org.uk/news/1-in-3-adults-interested-in-self-building/ 40 https://www.ipsos.com/ipsos-mori/en-uk 41 https://www.gov.uk/government/publications/public-attitudes-to-house-building-fndings-from-the-british-social- attitudes-survey-2018 42 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/fle/841815/BSA_ House_building_report.pdf was rated 4.6 / 5 in terms of importance and at- - Local housing targets (land allocated for new taining a higher build quality than a standard new housing) build was rated 4.8 / 5. - Local opposition to housing being permissioned - Viability of permissioned sites Supply - Build-out rates 104. It is important to distinguish between new housing land – either brownfeld or greenfeld Land – and existing housing land. Net additionality Local housing targets largely concerns the former, given that new hous- 108. National Planning Policy guidance requires ing land is fundamental to growing the overall local areas to assess demand for CSB housing. stock of housing. However, it is important to note This could mean housing land being allocated for that many CSB homes replace existing homes (i.e. CSB housing in addition to rather than in place of demolition and re-builds) simply because of the land for other types of housing demand. Where severe diffculty of fnding a new housing plot Local Plans are not up-to-date or ignore nation- of any type. The self-build land supply reported al guidance, they are less likely to refect the full by a sample of both urban and rural planning range of housing needs – leading to a situation authorities was reviewed by the Right to Build Task where CSB housing land could inadvertently be in Force. It was found that the majority of dwellings competition with other types of housing. permitted were either conversions and change of use or were a demolition and rebuild. 109. The Government’s new method for calculat- ing ‘housing need’ suggests some places should 105. In a NaCSBA survey (2020) of would-be be delivering more homes and thus will need to self-builders, 42 per cent said fnding a suitable adopt a higher target and allocate more land for plot of land was a barrier (and 49% the process housing. All things equal, more land being allo- of gaining planning permission).46 The severity of cated for housing should reduce the likelihood of this land constraint means that, for many, the only CSB displacing other housing development, which route is to buy an older property, demolish it and in turn will signifcantly increase the likelihood of build what they want. This leads to signifcant CSB scaling up being net additional. One obvious economic ineffciency and poor use of existing re- route is to create CSB exception sites for afford- sources, while not adding to the overall housing able provision on the edge of settlements, in the stock and also limiting access only to those with same way that already happens for rural excep- signifcant funds. tion sites generally, using one of several available models – such as embedded discounted market 106. Land use is regulated by the planning system, sale or community land trusts – to deliver afford- meaning that land supply for new housing is rela- able CSB provision. tively fxed compared to an unregulated free-market situation. Policy support for a particular mar- Local opposition to housing ket segment, such as CSB, could therefore displace being permissioned other sources of new housing if it is competing for 110. In some parts of the country there are short- a given amount of land within the current system. falls in housing delivery relative to local housing targets. The Government’s housing delivery test 107. In land supply terms, housing delivery is in- measurement 2020 (2019) suggests 33% of local fuenced by a number of factors: planning authorities failing to meet their housing

43 ibid 44 “Insights into New Home Buyers 2018”, Zoopla, 2018 https://advantage.zpg.co.uk/wp-content/uploads/2018/05/Insights-into-new-homes-buyers-2018.pdf 45 https://www.buyassociation.co.uk/2018/06/18/brits-still-prefer-period-properties-but-can-new-builds-win-us-over/ 46 https://nacsba.org.uk/news/1-in-3-adults-interested-in-self-building/

91 targets – indicative of land constraints in these were more likely to support more homes being areas.47 built in the local area (65%), than those who felt new build homes are badly built (53%). 111. On the one hand, new CSB provision in land • People who felt new build homes are badly built constrained areas could mean a high level of dis- were more likely to oppose new build homes be- placement. On the other hand, there is potential for ing built in the local area (28%), than those who CSB developments to help address land constraints felt new build homes are well built (15%) if such developments are more acceptable to local residents with a higher chance of being permis- 114. A ‘local connection’ for entry onto the CSB sioned, more viable, and/or are on sites which are register test may also improve support for any not of interest to mainstream developers. new CSB development.

112. In the other 67% of local planning authorities Viability – those achieving or exceeding their planning tar- 115. Whilst greater customisation may mean few- gets – housing land supply is currently adequate, er economies of scale which could reduce the via- assuming the housing targets meet objectively bility of CSB, there are two main factors which may assessed need. On the one hand, if these local mean CSB development is likely to be more viable areas are ensuring suffcient land to meet demand, than mainstream development overall. These are: this suggests potential for greater CSB provision to bring forward yet more land. On the other hand, CIL exemption. An exemption is available to any- if local housing targets are being met or exceeded, body who is building their own home or has com- there may be little incentive to permission addi- missioned a home from a contractor, housebuilder tional land for development, placing CSB housing or sub-contractor. Individuals benefting from the frmly in competition with other forms of housing exemption must own the property and occupy it supply. In short, CSB is less likely to crowd out as their principal residence for a minimum of 3 other forms of development if land is not con- years after the work is completed. Around half of strained and the authority is pro-development. local planning authorities were charging CIL as of late 2019.49 113. CSB applications may face less opposition given a perception they are higher quality and can Lower proft requirement. Given the risks involved be shown to deliver greater local benefts. Survey in speculative housebuilding, mainstream devel- evidence from BSA 201848 shows that: opers often have a target proft margin of 20% • People who felt new build homes are well de- of Gross Development Value (GDV). Models of signed were more likely to support more homes custom-building are lower risk – with customers being built in the local area (61%), than those who secured and revenue coming in much earlier in felt new build homes are poorly designed (53%). the process; and developers needing a lot less • People who felt new build homes are poorly capital. The proft requirement is therefore smaller. designed were more likely to oppose new build Self-builders do not primarily seek a proft margin homes being built in the local area (28%), than – though the average proft margin achieved has those who felt new build homes are well de- been estimated at around 10 per cent. signed (19%). • People who felt new build homes are well built 116. Self-build housing is often on individual

47 https://www.gov.uk/government/publications/housing-delivery-test-2020-measurement 48 https://www.gov.uk/government/publications/public-attitudes-to-house-building-fndings-from-the-british-social-attitudes-survey-2018 49 https://www.planningresource.co.uk/article/1121218/cil-watch-whos-charging-what plots outside of strategic planning allocations and ber of factors. For example, as mentioned earlier, ‘off the radar’ for mainstream developers – whose speculative housebuilders are constrained by the preference is for larger, lower risk sites, which are absorption rate within a given local area. This is a needed to deliver economies of scale and a re- particular challenge on larger sites, as explored turn on investment. The evidence on custom build in the Letwin Review. The Letwin Review called tends to be around smaller sites - those that might for greater product diversifcation on larger sites; otherwise have been of interest to smaller build- whilst housebuilders often stress the need for a ers wanting to build standard new homes. There diverse range of sites, with sales and production is therefore likely to be some competition with linked to the number of sales outlets rather than smaller builders in this regard. just the area of land.51

117. However, growth in CSB provision is likely to 119. Single self-build plots are unlikely to impact provide a net beneft to small builders where they on the market absorption of housebuilders’ out- serve the CSB market – by providing access to a put, given the high level of product differentiation, larger range of small-scale projects. According and as such are not subject to the same degree to a survey of small builders (FMB Survey 2020) of market absorption constraint in their own right. 56% of respondents said they build homes only as The question then is whether custom build helps contractors; 12% build homes only as developers; to achieve higher build-out rates overall. 32% build as both developers and contractors.50 Of those who build as a contractor, 81% have built 120. Given the very small number of custom build new homes in the last year to the plans and speci- sites in the UK it is hard to draw frm conclusions. fcation of the homeowner (also known as self and However, CSB sites are generally smaller on aver- custom build). age – and smaller sites are associated with quick- er build-out rates. Most CSB homes are 1&2 unit Build-out rates plots. Based on a sample of 3+ unit sites – the 118. Build-out rates are infuenced by a num- majority of CSB homes are on smaller sites:

Table 10: Distribution of project size for 3+ unit sites, based on a sample of obtained from Glenigan

50 https://www.fmb.org.uk/static/d20e9ab9-ed3d-42f0-ba1322ee8add369b/House-Builders-Survey-2020.pdf 51 https://www.gov.uk/government/publications/independent-review-of-build-out-fnal-report

93 Table 11: Distribution of project size for 3+ unit projects permissioned and completed (2017-2021), based on a sample of obtained from Glenigan

121. Lichfelds (2016) found the bigger the site the if the labour market is working well then supply will lower the proportional buildout rate on average.52 In eventually adjust to meet a higher level of demand their sample of sites, the average build out (delivery) and that, in economic terms, this is a short-run prob- rate for sites between 0-99 homes was just under lem. This underscores a general point of a need for 40% (of the site’s permissioned homes) per year. long term policies to support labour market adjust- For sites between 100-499 homes it was just over ment which probably also includes those policies 20% per year, for 500-999 homes it was 10% per year. which support housing market stability. In simple terms: • a site of 99 units may yield c40 homes per year 126. A second mitigation is that such labour short- • a site of 499 units may yield c100 homes per year ages, if they persist because the construction labour • a site of 999 units may yield c100 homes per year market is dysfunctional, should encourage the market to adjust in other ways such as reduced reliance 122. From a small sample of CSB sites extracted on labour and increased reliance on capital such as by Glenigan from their data, the build-out times are Modern Methods of Construction (MMC). CSB is more shown in table 11. likely to involve non-standard construction methods, including Modern Methods of Construction (see box Labour and materials 3). The sector is therefore less reliant on the same 123. There is strong evidence of tight labour and ma- pool of labour (e.g. on-site bricklaying) and materi- terials markets over the past few years – though less als (e.g. bricks) as mainstream housing supply. 54 At of a constraint than planning, availability of land and Graven Hill , the UK’s largest CSB community, one access to fnance. Recent reports suggest increasing third of self-build homes constructed between 2018 concerns about the supply of skilled workers relative and 2021 have used MMC.55 to other factors. 127. Insofar as CSB helps spearhead the wider take- 124. Under such conditions different forms of new up of MMC it could also create net additionality in housing supply are inevitably competing for the the short term by reducing the stranglehold of tight same pool of labour/materials and policies to help labour market conditions on housing supply over- one form will displace another. all. In this regard, a number of countries with high levels of self-provided housing (such as Japan and 125. However, there are mitigations. A frst mitiga- Germany) also rank highly in their adoption of MMC – tion concerns labour market dynamics, namely that showing a strong correlation between CSB and

52 “From Start to Finish: How quickly do large-scale housing sites deliver?”, Nathaniel Lichfeld & Partners (now Lichfelds), 2016 53 FMB Housebuilders’ Survey 2020, Federation of Master Builders, 2020 https://www.fmb.org.uk/static/d20e9ab9-ed3d-42f0-ba1322ee8add369b/House-Builders-Survey-2020.pdf Table 12. Survey evidence on the constraints faced by small housebuilders

54 A report by commissioned by MCHLG concluded that MMC would be unlikely to be transformational as long as consumers continue to demand traditional housing types. CITB, 2019 55 https://www.ukconstructionmedia.co.uk/news/graven-hill-embraces-future-of-building/?sector_id=3175 56 “A modern approach to construction”, Savills, 2020 https://www.savills.com/impacts/new-technology/why-modern-methods-of-construction-are-a-good-ft.html

95 Figure 7. Self-provided housing supply relative to other sources of supply – average of completions per person for a sub-set of countries where longer-term data is available

greater use of MMC.56 Finally, it is worth noting the tries where longer-term data is available (France, potential contribution of CSB to stability of demand Germany, Ireland, Japan, Netherlands, Norway, Po- for labour and materials over the housing market land, Switzerland, USA). cycle making short term labour shortages less likely. 130. From 2010 to 2017 self-provided housing 128. Speculative housebuilders are highly sensitive remained at around 2 completions per 1,000 pop- to housing market downturns – reducing their out- ulation, whilst other forms of housing supply, in- put quickly and sharply in response to market falls. cluding speculative housebuilding, grew from that This can lead to supply-chain capacity being reduced, level to more than 3. The experience has been making it harder for housebuilders to increase their broadly similar in the UK where housing sup- output in the upturn. Evidence considered later on ply nearly doubled since 2012 in net additional suggests CSB housing delivery is much more stable terms whereas CSB has been relatively fat. There – both in the UK and internationally – suggesting is some variation between countries, which may it can help to retain a baseline of production and refect greater land constraints in different places supply-chain capacity through the market cycle and and also differences in planning regimes. The key support productivity by ensuring a steady and secure point from the international evidence is that cus- workforce. This has wider benefts for the industry tom and self-build housing can be, and largely is, and overall housing delivery. complementary to other forms of housing supply.

International evidence 131. All in all, growth in CSB housing has the 129. The international data suggest that specu- potential to be net additional where (a) there is lative private housebuilding has grown alongside a high level of differentiation with standard new stable levels of self-provided housing – rather build types; (b) support is targeted in areas where than crowding it out. The chart above shows the additional land is likely to be brought forward cross-country (simple) average of self-provided and/or any support to the sector is linked to addi- housing completions per 1,000 population – rela- tional land supply being made available. tive to the cross-country average of housing completions from other sources (largely speculative BENEFITS OF CUSTOM AND SELF-BUILD private housebuilding). This is for a subset of coun- 132. As well as the potential to be net additional

57 We use private enterprise completions as our main ‘overall completions’ measure because this is more a like-for-like comparison. Tis is because it strips out afordable housing built by housing associations and councils, which does not feature in the self-build make-up. Afordable housing also tends to be non-cyclical or pro-cyclical 58 https://www.gov.uk/government/statistical-data-sets/live-tables-on-house-building 59 standard deviation divided by average level in order to make the two measures comparable and support progress to building 300,000 homes rising house prices, but are extremely responsive in England a year, scaling up self and custom build to house price falls. UK CSB completions across will potentially have other socio-economic bene- the economic cycle appear to be less volatile than fts that also help to explain why the public would completions overall.57 A consistent custom and like to see more of it and why, equivalently, there self-build data series, derived from HMRC VAT re- are economic welfare gains to society. These wel- covery returns, has been produced by the NaCS- fare gains occur irrespectively, whether self and BA. It runs from 1983/4 and helpfully covers the custom build is net additional or not. 1990/91 and 2008/09 recessions. For overall completions, we use the MHCLG live table 209.58 Both 133. The crucial point is that CSB is more likely to datasets are for the UK. maximise the consumer surplus of those commissioning their own homes, because it enables them 137. The table below provides a summary of some to design a home that is more bespoke and tailored standard metrics used to gauge volatility of self- to their requirements than a standardised build, build completions and overall completions – exclud- particularly where it is flling a missing market. ing and including affordable – using these datasets.

134. However, in instances where a CSB home 138. The peak-to-trough fall in CSB completions fully displaces a standard new build one, the con- during the 1990/91 recession was barely discernible sumer will broadly capture the 20% margin that and in stark contrast to the 31% fall in overall home would otherwise go to shareholders (other own- completions excluding affordable housing. Including ers) of speculative housebuilding companies. In affordable housing the fall in overall completions other words, there would be a reduction in the was less 26%. Both CSB and overall completions producer surplus and an increase in the consumer suffered massively in the 2008/09 recession (‘Great surplus. However, and perhaps counterintuitively, Recession’), with CSB completions falling 34%. But this will simply be a transfer and not increase so- this was signifcantly smaller than the 45% fall in cial welfare if starting from a perfectly compet- overall completions excluding affordable housing. itive position (unless it is passing from richer to poor benefciaries). It will certainly increase social 139. Over the 1983/4 to 2016/7 period for which welfare if there is any degree of market power (i.e. we have data, the standard deviation measure of in the land market). CSB completions of 0.12 is markedly less than that of overall completions excluding affordable hous- 135. Other manifestations of social welfare gain are ing of 0.17. The volatility during the recessionary likely to include: better environment and sustain- periods is likely to explain most of the volatility ability outcomes (reducing negative externalities); we observe in both series. We also observe the better design and appearance of build or ‘building CSB series generally appears less ‘choppy’, with beautiful’ (increasing positive externalities); en- a continued upwards trend trajectory during the hanced housing market stability (a public good, 1990s recession (unlike overall completions), with though it is perhaps unusual to think of it in these the only real period of volatility during the Great terms), and localisation of economic benefts from Recession. The following chart plots completions construction activity. These are considered in turn. of CSB, overall build excluding affordable housing and overall build including affordable, as a Greater housing market stability percentage of their respective averages for the 136. Housing supply in the UK is highly volatile. 1983/4 to 2016/7 period. This allows the volatility Private housing completions respond weakly to of the series to be compared visually.

Table 13. CSB completions versus overall completions, volatility metrics, UK

97 Figure 8. CSB completions and overall completion levels (period average = 1), 1983/84 - 2016/17, UK

Figure 9. CSB completions versus trend, 1983/84 - 2016/17, UK

Figure 10. Localised spending per £100 (main build costs)

60DETR Housing and Construction statistics cited in Joseph Rowntree Foundation 2001, Homes to DIY for: the UK’s self-build housing market in the twenty-frst century 140. The cumulative loss of output over the 34- to site, and provide an important source of working year period due to volatility – measured by gaps capital for builders (channelled through trade credit between the trend line and output below it when accounts). By contrast, the major housebuilders have this occurs – is found to be 5.2% for CSB and 5.6% national and regional supply chains. They are large for overall completions. This difference is only enough to be able to bulk buy and negotiate dis- modest, but the CSB number is probably disadvan- counts without the need for middlemen. taged by its low starting point in 1983/84, which earlier data suggest was structural rather than cy- 143. The evidence presented largely refects self- clical.60 Particularly, these earlier data show CSB rather than custom-build (with the latter being completions rising throughout the period punc- very small scale at the present). And the compari- tuated by the 1980/81 recession. We therefore son is with large housebuilders. The gap in local- estimate an adjusted output loss due to volatility ised spending between CSB and smaller builders for CSB of only 3.1% (again, versus the 5.6% for is likely to be much smaller. This evidence is only overall completions). illustrative – based on current survey evidence of self provided housing projects, construction meth- More localised economic benefts ods, materials used and sourcing – but gives a feel 141. A ChamberlainWalker report for Mid-Devon for the potential scale of additional localised ben- Council (commissioned by the Right to Build Task- efts. The extent of additional benefts received force) in 2019 investigated the extent to which locally, compared to mainstream housing supply, CSB provides local economic benefts compared will in practice vary on a scheme by scheme basis. to mainstream housebuilding. The study found a much higher proportion of localised spending – Better quality and not specifc to Devon – for CSB compared to large environmental performance housebuilder projects (£45 versus £22 per £100 of 144. There is a clear recognition that among build costs i.e., more than double). This is poten- self-builders and potential self-builders that tially important as a local incentive for communi- quality is likely to be much higher than typical ties and their representatives to promote/accept new build housing. A NaCSBA survey (2020) asked CSB housing – and highly relevant to the question would-be self-builders about the advantages of additionality. of self-building. 43% agreed the quality of build could be higher than that of a pre-built home; and 142. The higher proportion of local spending for CSB 33% noted greater environmental sustainability refects the fact that self-builders are more likely to as a beneft.61 contract small, more local builders and to source materials via locally-based builder’s merchants. 145. According to EPC data published by MCHLG, Builder’s merchants aggregate demand to achieve most existing properties have an EPC rating of D.62 purchasing power with the major product suppliers, For new builds overall (including conversions) the ensure timely distribution and delivery of materials vast majority (80%) have an EPC rating of B.

61 https://nacsba.org.uk/news/1-in-3-adults-interested-in-self-building/ 62 https://www.gov.uk/government/statistical-data-sets/live-tables-on-energy-performance-of-buildings-certifcates

99 Figure 11. New build EPC ratings

146. By contrast to existing properties and new build to be considered alongside embodied energy in the in general, it is likely that a higher proportion of CSB construction process. As noted elsewhere, the CSB homes achieve an ‘A’ rating. An ‘A’ rating is only likely is more likely to adopt new innovations in building, to be achievable using renewables as the primary including MMC, making it likely that growth in the heating system, on top of the requirements listed sector can help to improve the sustainability of new above. The majority, 54 per cent, of CSB homes use housing supply. renewables as the primary heating system, including 148. Mainstream new build housing is likely to con- air source or ground source heat pumps, mechanical tinue to improve and the Government has recent- ventilation with heat recovery and solar panels.63 ly introduced higher standards. However, given the importance of environmental credentials to many 147. Energy use associated with the occupation of self-builders, the sector is likely to remain ahead of new buildings – refected in EPC ratings – also needs the curve.

63 Homebuilding and Renovating Self & Custom Build Market Report, Homebuilding and Renovating, Centaur Media, 2017 64 Te Green Book, HMT (2020) https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-governent/the-green- book-2020 DCLG Appraisal Guidance https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_ data/fle/576427/161129_Appraisal_Guidance.pdf ECONOMIC BENEFITS OF SCALING UP CSB • Additionality of CSB. Upper estimate of 75% to 149. This economic analysis has identifed a gap in refect highly differentiated CSB supply from stan- CSB provision in England of at least 20,000 a year. A dard newbuild housing (low substitutability) and a number of scenarios for increased CSB delivery are good supply of new land specifcally for CSB that modelled in what follows to estimate the economic is mostly additional. Lower estimate of 50% to re- beneft of scaling up the sector, as shown in table 14. fect CSB is closer to standard newbuild housing (medium subsitutability) and only a modest sup- 150. The economic benefts are quantifed in line ply of new land specifcally for CSB. with the HMT Green Book and supplementary de- • Geographical distribution of CSB. A range of partmental guidance, including the MCHLG Ap- distributions based on the distribution of permis- praisal Guide.64 A number of assumptions are made sions for one and two unit schemes (based on the regarding the net additionality of new CSB delivery Glenigan data), the distribution of registrations on and its geographic distribution across England. The the Right to Build Registers (2016 to 2018/19, cu- key assumptions are: mulatively) and a uniform distribution across the English Civil Parishes.

Table 14: scenarios for scaling up CSB, England

101 Table 15; economic beneft of scaling up CSB, per annum, England65:

65Te impacts have been measured in terms of a single increase in CSB building in 2025/26. E.g. the +10k scenario measures the impact of building 20,000 CSB homes in 2025/26, compared to 10,000. Terefore, these impacts represent total impacts for a single year of building and could be counted again for any subsequent years of build. 151. Assumptions around geographical distribu- impacts) are more speculative and highly sensitive tion make a big difference to the results because to assumptions. These range from £14.7m (£5.3m the 'land value uplift' (LVU) of new housing de- reduced energy use, £8.7m reduced CO2e, £0.7m livery – which captures the private as opposed improved air quality) in the 10,000 p.a., 75% ad- to public beneft – varies signifcantly across En- ditionality scenario; through to £88.2m (£31.8m gland. The results are shown in Table 15. reduced energy use, £52.1m reduced CO2e, £4.2m improved air quality) in the +30,000 p.a., 50% ad- 152. The potential benefts of increasing CSB sup- ditionality scenario. ply are large and wide ranging, depending on the growth of the sector and views on its net addition- 155. An interesting fnding is that even with low- ality to overall new supply. The total estimates on er levels of additionality, new CSB homes can im- benefts range from £274m - £484m per annum prove social welfare by being more sustainable under a +10,000 p.a., 50% additionality scenario; than any standard-build homes they displace. As through to £1,288m - £1,918m under a +30,000 noted in the previous section, most conventional p.a., 75% additionality scenario. new build homes achieve a ‘B’ rating on their EPC, whereas CSB units are much more likely to achieve 153. These benefts largely refect the beneft of an ‘A’ rating. We have assumed that a conventional additional housing supply (as measured by Land new build will have improved energy effciency by, Value Uplift) and the CSB sector’s contribution on average, 31% by 2025-26 compared to today’s to the Government’s 300K target through prod- standards, in line with aspirations on the Future uct diversifcation and flling a missing market. Homes Standard. In spite of this improvement, en- The overall scale of benefts will depend on the vironmental benefts remain from building more new CSB homes being built where they are most CSB homes. The more homes that are simply dis- needed, and with suffcient new land being made placed by CSB, the greater this potential environ- available for this to happen. Crucially, these are mental impact (but the corresponding LVU is lost annual impacts which would be repeated under as the home is no longer additional). Although sustained period of years if building at these lev- these impacts are smaller than the LVU impacts, els were sustained. they are signifcant enough to potentially make the case for increasing the CSB sector even if this 154. The environmental benefts (the value of re- is at the expense of conventional build. duced CO2e emissions and improved air quality

66Job impacts should not be viewed as additional to the other impacts listed in the table and are provided as context. Te value of economic impact is contained within the ‘Land Value Uplift’ (LVU) calculation. However, if the jobs were valued according to their Gross Value Added (GVA), it provides a useful validation of the LVU valuation. Te GVA of the 8,625 jobs in the 75% additionality, +10,000 CSB scenario is £479m; which is in the corresponding LVU range of £415m to £625m.

103 Photograph: Lilac MHOS Ltd

Footnotes to Chapter one Ensuring the right conditions: i Douglas Murray, Te Madness of Crowds, Bloomsbury Continuum, London 2020 ii Martin Wolf, Why Globalization Works, Yale University Press, New Haven 2004 iiiNicholas Boys Smith, “Where the Heart is”, in Te Critic magazine 25 June 2021 iv Research by Nationwide Building Society indicates that 61% of people would like to commission a home to their own design at some point in their lives. Among 18 to 34 year-olds the fgure is 80%. Among those actively looking at getting on the property ladder it is 83%. v Research by the Home Builders’ Federation indicates that only 33% of people surveyed would be likely to consider buying a new home. 2016 “Home Buyer Intentions and Opinions”, Home Builders’ Federation & YouGov. vi “Our approach to thoughtful housebuilding” Nationwide Building Society, February 2020 vii Te benefts of a genuinely customer-driven approach can be seen on a current scheme built by Nationwide Building Society of 239 homes in Nationwide’s home town of Swindon, where the building society is developing a derelict brownfeld site where no other housebuilder was prepared to build. Following an exemplary consultation process in which local people were asked what they actually wanted, planning permission was achieved without a single objection from local people.

104 LILAC – or Low Impact Living Afordable Community – is a co-housing community of 20 eco-build households in West Leeds. Te homes and land are managed by residents through a Mutual Home Ownership Society, a pioneering fnancial model that ensures permanent afordability. It is a new way of owning a stake in the housing market, designed to bring the bottom rung of the property ladder back within reach of households on modest incomes in areas where they are priced out of the housing market. It is designed to remain permanently afordable for future genera- tions. Members of the society are the residents who live in the homes it provides. Te society and not the individuals obtain the mortgage and so borrowing is cheaper.

105 Acknowledgements

y frst thanks are to the Prime Minister Custom & Self-Build Association (NaCSBA), for asking me to lead this Review, at and to Andrew Baddeley-Chappell, NaCSBA’s a time when there is urgent need to CEO. Both have been exceptionally helpful and Mfnd new answers to questions about how we cre- generous with their time over many years – as ate great places with better housing of all types well as for the work involved in this Review – and tenures. I am very grateful to Robert Jenrick, and I am enormously grateful to them. Bryony Secretary of State for Housing, Communities and Harrington missed the fun while engaged in the Local Government, and to Christopher Pincher, more important work of having a baby – and the Minister of State for Housing and Planning, building a house – but still helped with occasion- for their generous support. At HM Treasury, the al contact details that no one else could unearth. Chancellor of the Exchequer, Rishi Sunak, and And Mary Elkington has been a dedicated acting Chief Secretary to the Treasury Stephen Barclay, director of the Right to Build Task during Bry- have also been keen supporters of this project. ony’s absence on maternity leave. For assistance I am particularly grateful to the Ministry of in sourcing photographs I would also like to of- Housing, Communities and Local Government fer my thanks to Professor Paul Chatterton, Rosa for kindly ofering civil servants to help with Mann, Bob Tomlinson, Calum Taylor, Carole the workload. Emma Fraser, along with her col- Salmon, Craig White, Custom Build Homes and leagues Alice Bradley and Sally Frazer, supervised Graven Hill Development Company. In a Review a hard-working and dedicated team of ofcials produced to a very tight timetable I have inevita- to whom I am especially grateful: Paul Behan, bly not been able to include all the good ideas I Sarah Hardy, Rumana Kabir, Jake Prust and encountered – and I certainly would not regard this Daniel Richardson. Review and my recommendations as more than a Among the growing Custom and Self-Build contribution to an on-going debate about how fraternity I must thank Ted Stevens OBE and to make more great places and to fnd solutions Adri Duivesteijn for showing me what is possible. to our housing problems. Finally, I would like I would also like to ofer my warmest thanks to to thank Kay Emery for her work on design Mario Wolf, for many years the government’s and Charlotte Coward-Williams for technical leading expert on custom and self-build, who assistance, together with Matt Carry and Ed has been a steadfast source of advice and support Merry at Acorn Web Ofset. for almost a decade, and who has kindly assisted with this Review. I am very grateful to Sajid Javid who, as Housing Secretary, agreed to my request in 2017 that Mario Wolf could be released from the Ministry on secondment to become the frst Richard Bacon MP Director of the Right to Build Task Force. Member of Parliament for South Norfolk I also wish to ofer my deepest thanks to House of Commons Michael Holmes, the chairman of the National London SW1A 0AA

106 Below is a full list of those who assisted with this Review, including members of the public who sent in their ideas. I am most grateful to everyone for taking the time to participate. Tim Abbott is the Deputy Head architect of the Homelessness Paul Chamberlain is an economist, of Corporate Communications at Reduction Act 2018 former Civil Servant and co-founder of Barratt Developments Charlie Blagborough is Policy Manager a consulting frm, Chamberlain Walker Hiromitsu Abe is Product Design at the Building Societies Association Economics Manager at Sekisui House UK Tom Bloxham is the founder of John Champion submitted evidence John Acres is a Policy Director Urban Splash to the Review at the Land Promoters and Nick Blunt is Director at Urban Tom Chance is CEO of the National Developers Federation Curve Architecture Community Land Trust Network Jo Allchurch is a Senior Policy Advisor Chris Bosworth is Group Strategy (CLT Network) for Housing at the Local Government Director at Travis Perkins Lucinda Chapman is Principal Association (LGA) Nicholas Boys Smith is the founder Planning Ofcer at North East Darina Armstrong is CEO of of Create Streets, a commissioner Derbyshire District Council Progressive Building Society for Historic England and chairs Mark Clare is former CEO of Barratt Emma Atkins is Public Afairs Ofcer at the new Ofce for Place Developments and Chairman of the Campaign to Protect Rural England – Alice Bradley is a Deputy Director at Grainger plc the Countryside Charity (CPRE) the Ministry of Housing, Communi- Anne Cleaver is a Caseworker Andrew Baddeley-Chappell is CEO ties and Local Government for Richard Bacon MP of the National Custom & Self Build Mark Bretton is Chair of the Local Andrew Close is Director of Association (NaCSBA) Enterprise Partnership Network (LEP) Education & Profession at the Royal Keith Baker submitted evidence to Mark Bridgeman is President of the Town Planning Institute (RTPI) the Review Country Land and Business Rt Hon Dr Térèse Cofey MP is Peter Barr is Managing Director Association (CLA) Secretary of State for Work and Pensions of Sipco Ltd and a member of the Paul Britton is Senior Manager at and Member of Parliament for Sufolk Structural Timber Association (STA) Homes England and sits on the Right Coastal Lord Steve Bassam is Director of to Build Task Force Neil Cole is Head of Planning at Place at Business in the Community Paul Brocklehurst is Chairman of the Carlisle City Council Richard Bayley is an adviser to the Land Promoters & Developers Federation Gillian Cole-Andrews is Director of Board of Directors of Atkins James Buchanan is a Custom-Build Communications and Resource Paul Behan is a Civil Servant at the Manager at Oakwrights Development at People’s Self-Help Ministry of Housing, Communities Kyle Buchanan is Managing Director Housing in California and Local Government (MHCLG) of Archio Steve Collins is CEO of RentPlus UK Valerie Bearne is the Chair of Build Rt Hon Sir Robert Buckland QC MP Raymond Connor is CEO of A Dream Self-Build Association and a is Lord Chancellor, Secretary of State Buildstore member of NaCSBA for Justice and Member of Parliament Tom Connor is the founder and Hans Beekenkamp is an Advisor at for South Swindon Managing Director of Custom the Netherlands Enterprise Agency James Burgess is Parliamentary Build Homes John Beresford is Managing Director Assistant to Richard Bacon MP Charlotte Coward-Williams is of Buckland Development Kelvin Campbell is a collaborative Editor of Enki Magazine Brian Berry is CEO of the Federation urbanist, writer and Chair of the David Craddock is Managing of Master Builders (FMB) Smart Urbanism and the Massive Director of Elite Homes Lord Richard Best is Co-Chair of Small Collective Richard Crisp is a Commercial the All-Party Parliamentary Group on Andrew Carpenter is CEO of the Development Executive at Mansfeld Housing and Care for Older People Structural Timber Association (STA) Building Society Clive Betts MP is Member of Ralph Carpenter is the founder of Prof Tony Crook is Emeritus Parliament for Shefeld Atterclife and Modece Architects and a member of Professor of Town and Regional chairs the Housing, Communities and the Royal Sustainable Futures Group Planning at Shefeld University Local Government Select Committee Chris Carr is Joint Manging Director of Russell Crow is Planning Director Adam Birchall is the Head of Sustainable Carr & Carr and a board member of the at L&Q Estates and a member of Development at Cornwall Council Federation of Master Builders (FMB) the Land Promoters & Developers Stewart Blackburn is Chairman Mairead Carroll is Associate Director Federation of Veterans Norfolk at the Royal Institution of Chartered Sally Culling is Senior Parliamentary Bob Blackman MP is Member of Surveyors (RICS) Assistant to Richard Bacon MP Parliament for Harrow East, a member Marie Chadwick is Policy Leader at the Councillor Keith Cunlife is the of the House of Commons Select National Housing Federation (NHF) Deputy Leader of Wigan Council Committee on Housing, Communities Shelly Chahal is the CEO of Jo Curson is Head of Development at and Local Government and the Animo CiC GreenSquare Group

107 Karen Curtin is Managing Director at East Hampshire District Council Michael Holmes is Chairman of the of the Graven Hill Development Jane Gallifent is Director of Development National Custom & Self Build Company & Sales at Aster Group Association (NaCSBA) and Content Bob Davis is Membership Manager at Councillor Susan Gambles is Cabinet Director at Homebuilding & the Structural Timber Association (STA) Member for Housing and Welfare at Renovating magazine David Dale is a Planning Assistant at Wigan Council Tom Howard is an architect and a Derbyshire County Council Peter Garrett is Managing Director of Director at MH Workshop Robert Davis is a Content Director Keyland Developments Fiona Howie is CEO of the Town and at Glenigan Will German is Director of Help to Country Planning Association (TCPA) Charlie de Bono is an architect and Buy at Homes England Anthony Hudson is an architect and Director at LivedIn Custom Build John Gillespie is a custom and founder of Hudson Architects Ken Dijksman is the owner of self-build consultant and former Daniel Hudson is Strategy Lead Dijksman Planning National Development Director at the Specialist at South Lakeland District Jenny Divine is Policy and Networks Community Self Build Agency Council Advisor at the Royal Town Planning Andrew Gray is an Associate Director Nigel Hugill is CEO of Urban & Institute (RTPI) at Aitchison Rafety Civic and Chairman of the Centre for Liz Dunster is Strategic Planning and Richard Groves is a Planning Cities Infrastructure Ofcer at Plymouth Policy Ofcer at South Derbyshire Antsushi Hyodo is Product Design Council District Council Manager at Sekisui House UK Hew Edgar is Associate Director of Liam Halligan is an economist, Laura Ingham is Managing Director Policy at the Chartered Institute of author, journalist and broadcaster of Wigan Borough Armed Forces HQ Building (CIOB) Max Halliwell is Communications Owen Jarvis is the CEO of UK Mary Elkington is a chartered town Manager at Mitsubishi Electric Cohousing Network planner and Acting Head of the Right Heating & Ventilation Systems Will Jefwitz is Head of Policy at the to Build Task Force Catherine Harrington is a planning National Housing Federation (NHF) Adrian Ellis is founder of AEA consultant who advises the Right to Rt Hon Robert Jenrick MP is Consulting and Team Leader at East Build Task Force and the No Place Secretary of State for Housing, Hampshire District Council Left Behind Commission Communities and Local Government Paul Ellis is CEO of Ecology Sarah Hardy is a Civil Servant at the and Member of Parliament for Newark Building Society Ministry of Housing, Communities Peter Johns is Managing Director of Brian Emmott is a Director at and Local Government (MHCLG) WW Magazines and Consumer Housing People, Building Communities Richard Harrington is CEO of Representative at National Custom Audley English is a Director of BuildEco Buckinghamshire LEP Network and Self Build Association (NaCSBA) Dr Nicholas Falk is the founder of Nicky Harris is Development Teresa Jones is a Director at URBED Manager at Halton Housing Trust Scandinavian Homes Linda Farrow is a Director at Agile Mark Hallett is Lead Development Matthew Jupp is a Principal Mortgag- Homes and Property Director at Igloo Regeneration es Policy Advisor at UK Finance Mark Farmer is founder and CEO Duncan Hayes is Marketing and Rumana Kabir is a Civil Servant at of Cast Consultancy and the Communications Manager at National the Ministry of Housing, Communi- Government’s Champion for MMC Custom and Self Build Association ties and Local Government (MHCLG) Colin Field is CEO of Safron (NaCSBA) Dr Tia Kansara is a sustainable design ex- Building Society Kate Henderson is CEO of the pert and co-founder of Kansara Hackney Simon Firkins is the Managing National Housing Federation (NHF) Gillian Keegan MP is Member of Director of SF Planning Claude Hendrickson is an accredited Parliament for Chichester and the Rt Rev Dr Guli Francis-Dehqani Community-Led Homes advisor and Parliamentary Under-Secretary of State is the Church of England’s Bishop was one of the founders of the for Skills and Apprenticeships for Housing Community Self Build Agency Konishi Kenta is CEO of Sekisui Emma Fraser is the Director of Paul Henry is the Managing Director House in Japan Housing Markets and Strategy at the of Esquire Developments Levent Kerimol is a Director at Com- Ministry of Housing, Communities Richard Hepworth is Group Director of munity-Led Housing and Local Government (MHCLG) Project Management at Urban & Civic Poppy Kettle is Senior Policy Advisor Sally Frazer is a Deputy Director at Clive Hickman is CEO of the Manu- (Housing and Planning) at the Royal the Ministry of Housing, Communi- facturing Technology Centre (MTC) Institute of British Architects (RIBA) ties and Local Government Stephen Hill is an architect, specialist Andrea King is Principal Planning Harvey Fremlin is Managing Director consultant and founder of C2O Future Ofcer at Northumberland of the National Self Build & Planners County Council Renovation Centre David Himmons is Director of WB Stephen Kinsella is Chief Land & De- Danielle Friedman-Brown is Timber Innovations and a member of velopment Ofcer at Homes England Regeneration & Place-Making Manager the Structural Timber Association (STA) Jan Jaap Kolkman is a Councillor in Deventer, Netherlands and founding Ben Marten is a founder of Leaper Land background in the fnance industry Director of the Expert Group Eigenbau Promotion with a background in residential Liza Parry is CEO of Housing People, Danny Kruger MP is a longstanding and commercial property development Building Communities community-led housing expert and Bill Marshall submitted evidence to Alastair Parvin is an architect and Member of Parliament for Devizes the Review co-founder of Open Systems Lab Dr Michael La Fond is an independent Alastair Martin is Secretary and Keeper WikiHouse Co-Housing expert in Berlin of Records at Te Duchy of Cornwall Damian Paterson is Deputy Director Charlotte Lang is a Partner at Tom Macartney is Development of the Ofce of Veterans Afairs Hanbury Strategy Director at Trivselhus Clare Pickin is Associate Director at John Laverick is Managing Director Kevin McCloud is a designer, writer the Manufacturing Technology Centre of Warrington & Co and television presenter (MTC) Rev Dr Shannon Ledbetter is the Kevin McGeough is Director of Chris Pickstone is Head of Mortgage Social Justice Minister for Lancashire Ebbsfeet Healthy New Town Strategy at Furness Building Society Collaborative Ministry and the founder Programme and Head of Placemaking Richard Pillar is the founder of and Chair of Housing People, at Ebbsfeet Development RentPlus Building Communities Caroline McIntyre is a Director at Ian Piper is the CEO of Ebbsfeet Sir Oliver Letwin is author of the Spring Planning Development ‘Independent Review on Build Out’ and Sarah McMonagle is Head of External Rt Hon Chris Pincher MP is Minister a former MP and Cabinet Minister Afairs at the Campaign to Protect of State for Housing & Planning and Andrew Lewer MP is Member of Rural England – the Countryside Member of Parliament for Tamworth Parliament for Northampton South Charity (CPRE) Nick Pollock is Head of Planning and a member of the House of Iain McPherson is CEO of at Te Duchy of Cornwall and a Commons Select Committee on Countryside Properties member of the Archbishops’ Housing Housing, Communities and Local Tomas McSherry is a fnance expert Commission Government; he chairs the All-Party at BuildStore and a member of the Anthony Poulton submitted evidence Parliamentary Group on SME Builders Structural Timber Association (STA) to the Review Adele Lewis-Ward is a chartered Hilary McVitty is the Head of External Ben Preece Smith is Diocesan surveyor and Head of Development Afairs at the Building Societies Secretary for the Diocese of Finance (Midlands and North West) Association (BSA) Gloucestershire at Homes England Wilf Meynell is an architect and James Prestwich is Director for Policy Opinder Liddar is an architect and Director at Studio Bark and Public Afairs at the Chartered Director at LAPD Architects Charlie Mills is Managing Director Institute of Housing (CIH) Mark Livesey is CEO of the Local of Oakwrights Jake Prust is a Civil Servant at the Enterprise Partnership Network (LEP Paul Miner is Head of Land Use and Ministry of Housing, Communities Network) Planning at the Campaign to Protect and Local Government (MHCLG) Mark Lloyd is CEO of the Local Rural England – the Countryside Mark Pullin is Chief Planning Ofcer Government Association (LGA) Charity (CPRE) at Ebbsfeet Development Corporation Toby Lloyd has served as Head of Denis Minns is a Consultant Surveyor Oliver Purday is Managing Director of Policy at Shelter and as Special Adviser at RDP Construction Bowbridge Homes in the Prime Minister’s Policy Unit Andy Mojer is a chartered town Tracy Reeve is Ofce Manager to Street; he chairs the No Place Left planner, Associate Director at Tetlow Richard Bacon MP Behind Commission King Planning and a member of the Daniel Richardson is a Civil Servant at Katy Lock is a chartered town planner Right to Build Task Force the Ministry of Housing, Communities and the Director of Communities at David Morris is a consultant at and Local Government (MHCLG) the Town and Country Planning Chamberlain Walker Economics Paul Richardson is an architect and Association (TCPA) Andrew Moses is Head of Lending at owner of Verte Architects Stephen Lodge is Executive Director Te Scottish Building Society David Richmond CBE is the of Development and Strategic Asset Tony Mulhall is Associate Director Independent Veterans Advisor at Management at Abri at the Royal Institution of Chartered the Cabinet Ofce Brian Love is a Director at Love Surveyors (RICS) Keith Rickman submitted evidence to Architecture and the CEO of Ben Murphy is Estates Director at the Review ConnectedCities Te Duchy of Cornwall Ian Rigarlsford is External Afairs David Lownds is Head of Marketing Neil Murphy is the founder of TOWN Manager at Ecology Building Society and Business Development at Hanley Jon Mussett is Operations Director of Mary Riley is Managing Director of Economic Building Society the Construction Innovation Hub, a Mary Riley Solutions and a member of Charlie Luxton is an architectural partnership between BRE and MTC the Structural Timber Association (STA) designer and television presenter Richard Page is CEO of Bloc Group Philip Roebuck is a Partner at Angus Macdonald is a Housing Dom Palmer-Tomkinson is a founder Cushman & Wakefeld Consultant at Community Assist of Leaper Land Promotion, with a David Rudlin is a Director at URBED

109 and Chair of the Academy of Urbanism Calum Taylor is Managing Director housing and energy efciency policy at Paul Scully MP is Member of of Castle Media and Membership & the Country Land and Business Parliament for Sutton and Cheam Development Representative at the Association (CLA) and Under-Secretary of State for Small National Custom and Self Build Katie Warrington is a Self-Build Business, Consumers and Labour Markets Association (NaCSBA) Ofcer at South Gloucestershire Council Pauline Schijf is an Advisor at the Lord Matthew Taylor is a planning Joanna Welham is Clerk of the House Netherlands Enterprise Agency expert who has advised successive of Commons Select Committee on John Seddon is Managing Director of governments Housing, Communities and Local Vanguard Consulting Michael Taylor is Head of Marketing, Government Rachel Seymour is Corporate Products and Savings at Mansfeld Craig White is CEO of Agile Development Manager at Travis Perkins Building Society Property & Homes Charles Shaw is the Managing Piers Taylor is an architect, Chris White is Director of the Director of BRITAR broadcaster and academic Industrial Policy and Insight Centre Lulu Shooter is Head of Policy and Lucy Taylor reorganised at the Manufacturing Technology Public Afairs at the Federation of Richard Bacon’s ofce Centre (MTC) and Visiting Professor Master Builders (FMB) Simon Taylor is CEO of Melton of Industrial Strategy at Loughborough Lord Wei of Shoreditch is a social Building Society University entrepreneur and member of the Mark Tistlewayte runs the Southwick Derek Whitmarsh is National Housing House of Lords Estate in Hampshire and is the founder Development Manager at Lloyds Bank Edwin de Silva is Business and Chairman of Buckland Capital Allen Wilen is an Economics Director Development Director at Travis Perkins David Tomas is CEO of Barratt at Glenigan Tim Skelton submitted evidence to the Developments Andrew Wilford is Head of Planning at Review Richard Tomas is Development Esquire Developments Kim Slowe is a Non-Executive Advisor Director at Bloc Group Gez Willard is a planning consultant at Leaper Land Promotion, with a Alan Tompson is Managing Director and Director at WW Planning background in sustainable housing of Fidélitãs Mario Wolf is a former Civil Servant, David Smith is Managing Director of Ben Tompson is Deputy CEO of founding Director of the Right to Build St Modwen Homes the Mortgage Advice Bureau Task Force and Director of Planning Ros Snowball submitted evidence to Max Tolley is Policy Ofcer for and Strategic Engagement at Custom the Review England at the Royal Town Planning Build Homes Cord Soehlke is Baubürgermeister Institute (RTPI) Frances Wright is Head of Community of the City of Tübingen in Germany Sean Tompkins is CEO of the Royal Partnering at TOWN Hans Sparreboom is a Director at Institution of Chartered Surveyors (RICS) Ryo Yamaguchi is Assistant in the Steenvlinder, a Dutch Custom Rosie Toogood is CEO of Legal & International Business Department at & Self-Build specialist General Modular Homes Sekisui House UK Adrian Spawforth is a chartered Clementine Traynard is a Housing Alex Yendole is Principal Planning architect, town planner and Managing Policy Ofcer at the National Housing Ofcer at Staford Borough Council Director of Spawforths Federation (NHF) Gus Zogolovitch is Managing Director Anthony Spinney is Technical Sales Kenneth Trigueiro is CEO and of Unboxed Homes and Project Support Team Member President of People’s Self-Help Housing at Glatthaar in California Warranty Providers Paul Staines is Interim Head of Peter Truscott is CEO of Crest Nicholson BuildCare (BuildStore) Programme at Oxfordshire Housing Toru Tsuji is Operations Manager and Global Home Warranties and Growth Deal Deputy General Manager at Sekisui House ICW Insurance Services Mark Stevenson is Managing Director Martyn Twigg is Group Planning Di- LABC Warranty of Potton Homes and Vice-Chair of the rector at Gladman and a member of the Premier Guarantee Structural Timber Association (STA) Land Promoters & Developers Federation Q Assure Build Pat Steward is Head of Opportunity at Patrick Usborne is the founder of Agile Homes & Property Perpendicular Architecture Craig Strachan is Enabling Simon Vaughan is Lending Manager at Development Director at Green Axis Nottingham Building Society Adrian Swan is Managing Director of Ben Vickers is Senior Planning Policy Swan Homes Ofcer at Cheshire East Council Designed by: Kay Emery David Swan is Head of Specialist Chris Walker is an economist, writer Printed in the UK by: Acorn Consumer Products at Canopius Group and co-founder of Chamberlain Walker Web Ofset Sally Tagg is Managing Director of Economics Text paper: 80gsm Galerie Brite Bulk Foxley Tagg Planning Samantha Ward is Commercial provided by Sappi Andrew Taylor is Group Planning Director at Dudley Building Society Cover paper: 250gsm Horizon Ofset Director at Countryside Properties Hermione Warmington leads on provided by Elliot Baxter 111 Serviced plots of land in Herefordshire – which have all been sold to customers

“Te clichéd belief that ‘self-builders only that there are far more people who want want a quarter to a half acre plot on its a custom-built house in a place that also own’ is not the full story. Yes, there are ofers a small community feeling, where those people, but the simple fact that these friends and families can thrive together”. plots have all sold ofers clear evidence James Buchanan, Oakwrights Photograph: Courtesy of Oakwrights

13 serviced plots at Webbs Meadow at Tis site contains a broad mix of house Lyonshall, near Kington in Herefordshire sizes and a very varied plot size too, from Oakwrights and planners at Herefordshire a single storey property on a small plot for Council are making this lovely scheme a more elderly client wanting comfortable work, but have struggled with outdated living space with a manageable and small planning rules that repeatedly create extra garden, through to a larger 2 storey 4 bed- work – because the rules don't recognise room house on a large plot for a younger that customers should come frst. growing family.

113 Serviced plots of land in Switzerland – awaiting the next customers

Photograph: Mario Wolf

“When we have fully opened up the housing market and the planning process to the power of consumer choice, we will see more great places being developed which are warmly welcomed by their communities, with beautiful and more spacious houses, at keener prices – and that are better designed, better built, greener and which cost less to run, which enrich the lives of the people who live there – while driving innovation and inward investment. And when afterwards we have done this, we will look back and wonder why it took us so long”. Richard Bacon MP