31 Jul 2023

The Government’s obsession with home ownership won’t fix the housing crisis

"By ignoring BTR and co-living, and paying little attention to the climate crisis, Michael Gove’s recent speech was a missed opportunity" - Damien Sharkey, our managing director, comments in EG:

Speaking in London recently, Michael Gove, the Secretary of State for Levelling Up, Housing & Communities, spelled out the Government’s latest plans to ramp up the number of homes being built across the country.

While the renewed emphasis on delivering more housing was welcome, Mr Gove’s focus was on home ownership; there was no mention in his 5,000-plus word speech about other housing types which also need to play a role in boosting numbers. Nothing about build to rent. Zero on co-living.

There was also a lack of commitment to addressing the climate crisis, with little detail on why – and how – we should be delivering a variety of homes in such a way that they meet our environmental obligations, as well as the country’s housing needs.

There was a lot of talk about the need to build ‘beautifully’. But let’s be clear: the main challenge for the built environment right now isn’t delivering ‘beautiful’ homes, it’s about the ability to deliver enough sustainable, quality homes. By failing to acknowledge the extent of the climate emergency and focusing instead on increasing home ownership, the government risks losing sight of what is important.

We should be encouraged by the development community’s progress in addressing its carbon footprint, but the Secretary of State’s renewed emphasis on beauty is an unhelpful distraction. More constructive would be shifting our attention away from beauty and towards sustainability.

Gove recently suggested that energy efficiency targets for private landlords would be delayed or watered down. This is not only a missed opportunity to tackle both the climate crisis and living standards for millions of people across the country, but also overlooks the intrinsic benefits of purpose-built rental homes. Typologies such as build to rent or co-living are not only incredibly energy efficient thanks to their communal nature and in-built economies of scale, but excellent places for people to call home at different stages of their lives.

There should be objectives for local authorities and landlords on retrofitting activity. Existing housing stock could be improved at pace if retrofitting was incentivised; reforming the tax regime around VAT and how much can be reclaimed when retrofitting a building certainly needs to be addressed.

The Secretary of State also mentioned plans to extend Permitted Development Rights. Whilst converting other uses into residential is to be supported in principle, this must be subject to the planning process to safeguard quality, as well as reviewing the tax situation on retrofit.

Indeed, we should be delivering more homes at greater scale in buildings which are in what we like to call their ‘second cycle’. We recently set up HubCap for this purpose: to deliver low-carbon commercial-to-living building conversions. By transforming these underused assets into hundreds of new homes, we are bringing more vibrancy back into these neighbourhoods, as well as addressing the housing and climate crises head on. With four sites in our portfolio across London and Edinburgh, and plenty more in the pipeline, we see this as being fundamental to the long-term success of cities across the UK.

I’m glad the government has once again decided to put the spotlight on housing. But by focusing on home ownership and ‘beauty’, by ignoring the diversity of typologies available, and by overlooking the pressing issue of climate change, ministers risk missing opportunities to house vast number of people in places they deserve – that are secure, sustainable and high quality.