Lyons Housing Review

Rebekah Paczek from snapdragon consulting assesses the 180-page Lyons Housing Review ‘Mobilising across the nation to build the homes our children need', which was published on 16 October 2014.

The Lyons Housing Review was an independent review carried out by Sir Michael Lyons for the Labour Party’s Policy Review. The Lyons Review was published in 2014, based on the widely acknowledged premise that there is a housing crisis.

It is more than seven years since Gordon Brown declared ‘housing, housing, housing’ as his policy priority and yet we remain in as poor a position as we ever were. The Review sets out a roadmap for tackling the housing crisis to 2020. According to the Review, on day one of a Labour government, Ed Miliband will echo Gordon Brown’s words and establish housing as a priority before entering into a 50 day intensive programme establishing a Cross-Departmental Task Force and giving new responsibilities to the Homes and Communities Agency (HCA).

A new Planning and Housing Bill will be included in the first Queen’s Speech to be followed up by a raft of measures in the first Budget. The road map sets out an ambitious plan for the first 6 months, first year and, by the end of the second parliament of a Labour government. The road map includes review, assessment and flexibility to adapt the system which is quite novel for a policy proposition.

The Review identifies:

The need for a more diverse house-building industry, including small and medium-sized enterprise (SME) builders and public-sector building programmes.
Giving a strong leadership role for local authorities to intervene where the private sector fails to deliver.
Public, private and institutional investment are identified as key.
The report identifies communities as being partially responsible for not taking responsibility for the homes which are needed in their local areas.
The roadmap has a plan for how garden cities may be implemented, reviewed and assessed throughout the process.
The Planning Inspectorate (PINS) will be given greater powers to enforce housing by placing obligations on local authorities which fail to submit local plans by 2016. This is basically the same as the Coalition ruling that local authorities who fail to produce plans within a year of the National Planning Policy Framework (NPPF) coming into force would see the NPPF becoming the default document for decision-making.
Labour do not want to ‘help to buy’ but instead ‘help to build’, underwriting loans for small house builders.
As expected, there is a recommendation for a ‘use it or lose it’ policy on planning permissions in a move to combat land banking. This ties in with the central proposition that there is simply not enough land brought forward for development.
Enabling towns and cities to grow (it doesn’t specifically say by relaxing some greenbelt considerations but it is implied, particularly where the Review identifies the swathes of brownfield land which could be built on without specifying how much of it is within greenbelt).

Other measures of interest include:

Reforming compulsory purchase orders (CPO) to give more security in terms of land assembly.
Extending planning performance agreements (PPAs) and introducing measures to give certainty to developers and promote a partnership approach.
Reinstating ‘infrastructure first’ and ensuring an effective delivery approach
Tax Incremental Financing schemes (TIF) and infrastructure funds.
Providing incentives to ensure land is built out.
Opening up Land Registry information to make land ownership more transparent.
Reviewing the effectiveness of the community infrastructure levy (CIL).
Reviewing the impacts of the New Homes Bonus.

Much of the document looks at reintroducing measures which were introduced by the previous Labour government and abolished by the Coalition government, such as; moves towards spatial planning to be reintroduced into the NPPF; strategic planning obligations to be placed on local authorities (replacing the Duty to Co-operate with a Right to Grow), and the much vaunted return of Development Corporations.

The Review also focuses on the issue of ‘fairness’, identifying the crisis in terms of the mismatch between wage inflation and house price inflation. Labour will also look to review the definition of affordable housing, which is likely to mean the removal of the affordable rent policy in favour of a move back to social rent or at least a new category of locally-affordable rent, pegged to local incomes. This goes alongside the introduction of a policy to ensure that a proportion of new homes are marketed locally prior to wider marketing (market sale, not simply shared ownership and affordable).

Local communities will be given the power to build homes in the places people want to live. Neighbourhood plans are certainly here to stay and local authorities are supposed to put more energy into developing plans with local communities.

The Review is full of policy potentials, some of which are likely to be widely supported.

Given the names of those who made up the Review a detailed and strong document was to be expected and it does set out some clear approaches which will reassure those in the industry. However, the fundamental flaw in this plan is that it fails to take account of local politics and the dynamics between councillors who face elections and the communities they serve.

Policies are frequently flawless, it is only when people interact with the policy that the true effect is seen – Eric Pickles’ inbox is jammed full of housing appeals, a decent proportion of which are about existing communities opposing new homes; the closer to the end of your own housing journey you are, the more likely it is that you will reject the need to provide homes for those at the start of their housing journey. It is also why, close to general elections, governments start to give mixed messages (such as we will build 100,000 starter homes on brownfield land but we will restrict building on the greenbelt where much of this brownfield land is situated). This is why we still have a severe housing shortage despite years of efforts to address it.

Until local councillors are given a legal responsibility to deliver on housing numbers it is difficult to see how this will be addressed on a country-wide basis.

In December 2015, in response to the government’s target of creating one million new homes by 2020, the Commission reconvened on an independent basis to assess whether government policy would be sufficient to deliver the target or whether other measures might be necessary.

An update report was published on 11 February 2016 recommending that the government:

Broaden the housing strategy beyond the focus on home ownership to increase supply of both market and affordable homes for rent to secure sustainable growth in housing supply and lasting capacity in the house building supply chain.
Take a more ambitious approach to direct commissioning to deliver high quality and increase output and capacity through capturing land value to fund infrastructure, attracting a more diverse range of partners into housebuilding and building a mix of homes for sale and rent.
Work more closely with the industry in developing the model for starter homes to ensure an overall increase in homes and that the public subsidy of these homes exists in perpetuity to benefit future generations of house buyers and does not result in a reduction of affordable homes to rent.
Clearly acknowledge the importance of the contribution that local authorities and housing associations have to make to tackling the housing supply crisis; ensure local authorities have the flexibilities and support needed to promote, finance and commission new homes; and give housing associations the certainty they need to plan long term.
Ensure that government policies place greater emphasis on championing the highest quality of design and environmental standards for new homes and the places in which they are built.

Chair of the Commission, Sir Michael Lyons said: "You cannot lead a housing crusade unless you are willing to draw in the contribution of all your allies: the volume builders really committed to growth; the small builders who have stopped building homes; the investors who want to build high quality homes to rent; the local authorities struggling to meet housing need and with the political will to do more and the housing associations now spending their time worrying about lost rent income rather than planning to build more.”