Despite Angela Rayner’s increase in annual housing targets, from 300,000 to 370,000, Atelier CEO, Chris Gardner, describes in his open letter to the deputy PM, why he feels these ambitions may still be missed.

Dear Angela Rayner MP,

Private developers deliver over half of the UK’s new housing stock; the barriers they face cannot be forgotten in your government’s plan to unlock housing supply.

While I am encouraged to see fresh ambition at the heart of the new housebuilding agenda, the current plan to tackle housing shortages is too narrow in its support for big housebuilders. It is missing the quick policy fixes that could unburden thousands of private developers.

Between 2021 and 2022 private developers delivered over 60% of the UK’s new housing stock. The fundamental role they play in addressing housing shortages is often overlooked and no attention is being paid to the frontline administrative burdens that are destroying the already tight margins that private developers operate under. The biggest obstacles to project delivery in the UK are the prolific use of Section 106 agreements and the community infrastructure levy (CIL) regime.

Time and time again, SME developers cite delays, inconsistency and onerous red tape in their experiences with local authorities implementing planning obligations on sites. In particular, the strict section 106 regime is being increasingly deployed as a terms and conditions mechanism across even the smallest sites, which are being unduly impacted by extensive obligations and specialist reporting. The delays are forcing SME developers to extend timescales on delivery resulting in increased costs and missed deadlines. These skyrocketing costs are destroying developer margins, forcing them to exclusively build expensive, high-end ‘luxury’ schemes and pass these unnecessary costs onto buyers. The legal complexity of Section 106 only exacerbates the drain on legal resources at local councils, who are already ill-equipped to deal with their own bureaucracy.

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CIL payments present another key obstacle to the delivery of housing and further drive-up costs for developers. Despite being introduced to fund improvements in the infrastructure local to sites, there is little evidence of the payments resulting in any such improvements. At this point in time, CIL payments are little more than additional costs that developers are forced to pass on to homeowners. A complete overhaul of the regime is needed to unburden developers who hold the potential to boost our housing supply.

Reform of the CIL payment regime would also directly benefit local authorities. If given the opportunity, developers would be more able to deliver affordable sites to buyers, creating a pool of new local taxpayers whose council tax payments can contribute to local infrastructure funding and the wider local economy.

To release our housing market from the shackles of understaffed local authorities, there are also bigger picture, long-term solutions that should be considered. The Building Safety Act put in place a precedent for local councils to outsource their property regulatory services to private companies. There is no question that local resources are stretched, and that private companies could quickly improve planning bandwidth. It is time for the residential sector to follow in the footsteps of education and care and adopt targets and an independent regulator equivalent to the CQC or Ofsted to oversee and relieve the gridlock in our planning system. Outsourcing planning departments to private companies across the country presents an obvious opportunity to create immediate capacity. Independent regulators and effective targets have the potential to see projects quickly off the ground, ensure timely and consistent implementation of planning policy and to ‘Get Britain Building’ again.

However, in the immediate term the government must address the lower-hanging quick fixes to accelerate the delivery of housing. Reducing the administrative burdens of Section 106 through reform and overhauling the CIL payment regime is absolutely critical if we are to reach the 1.5 million housebuilding target.

The time is now for the Government to prove to developers they are on their side and willing to support them in their ambition to quickly bolster our housing supply.

Yours sincerely,

Chris Gardner

Chief Executive Officer

Atelier