The property sector in the United Kingdom faces both deep uncertainty as well as a measure of continuity after Thursday’s general election, according to political consultant Nick Keable, who spoke at a UK general election briefing for ULI members last week. The UK general election will be held May 7 and the UK property sector is eagerly awaiting its outcome.

“We are in for a period of weak government,” said Keable, chief executive of Development Intelligence, a firm that helps clients navigate the planning process at various levels of government. “That brings uncertainty and property guys don’t like uncertainty. So, international investors will just press ‘pause’ as they already have done…GDP has slowed down by 0.3 percent.” Yet, all three major parties have vowed to keep the UK’s major planning policy intact, offering property developers and planners piece of mind. “The good thing is that whoever gets into power, we’re not going to reinvent the planning system. There may be some tweaks to planning policy but essentially we understand what the rules of the game are.”

Questions around homebuilding policies will also remain on the horizon as a new government addresses the UK’s long-standing housing shortage. “Housebuilding is a top line priority of government although the [the main parties] may have different understanding of the rules and ideas about how they are going to do it.”

 Campaign pledges on planning

The UK’s three main political parties — the Conservative and Unionist Party, the Labour Party, and the Liberal Democrats — have all made campaign promises to keep the National Planning Policy Framework (NPPF). This rare meeting of political minds will be fundamental to the property industry over the coming five years, according to Keable.

“The NPPF, no matter who wins, is staying,” said Keable. “That’s really important for those of us in development because it has simplified planning policy and it has been a huge aid to development.”

The Labour Party has been critical of the framework, even suggesting six months ago that it be dismantled. While Labour has backed away from that stance, there could still be attempts by a coalition or minority government to reform other aspects of the planning system. The Liberal Democrats have pledged to introduce limited third party rights of appeal over planning consents, which in Keable’s view could lead to chaos and madness.”

More importantly, the Conservative Party has indicated they would review the planning application process because it is too expensive and cumbersome, Keable said. He predicted that the Conservatives would also review the Community Infrastructure Levy, acknowledging its shortcomings as more of a boom-time tax policy that has not worked well in the current economic climate. Though not explicitly in the Conservative platform, Keable said such reforms are “good racing bets.”

Campaign pledges on housing supply

 As Keable put it, Labour is “obsessed” with land-banking by house builders and has promised a “use it, or lose it” policy for residential planning consents.

Keable was scathing about this policy pledge, pointing out that the land-banking issue has been addressed by as many as seven government-backed housing inquiries, starting with the Barker Review in 2004. None of the inquiries concluded that residential developers deliberately sat on housing consents simply to watch values rise.

“’Use it or lose it’ is a real issue for house builders. You’re not going to put in an application if you’re not hundred percent certain you’re going to build it because within three years the consent is no longer live.”

 According to Keable, the prevailing housing shortages date from the 1980s when local authority housebuilding came to a standstill. It is a public sector housing crisis not a private sector housing crisis, he declared, despite the political pressure on the volume house builders.

Either way, the Liberal Democrats have set a housing supply target of 300,000 homes a year, something the UK has not achieved since the late 1960s, a target unlikely to be reached over the next five years.

However, Keable argued that Labour has been clever in setting a campaign goals of 200,000 homes a year by 2020. Planning consents – largely private sector-driven – are already heading in that direction. Allowing for the lag between planning and completion, Labour’s target should be reached by the end of the next Parliament.

There is, though, the likelihood of cross-party support for “direct commissioning,” which was a big campaign promise for the Liberal Democrats. A 10,000-home direct commissioning pilot scheme is underway in Northstowe, Cambridgeshire. In this scenario, the public sector owns the land and commissions the private sector to build it out.

“That’s probably as near as modern politicians will get to state housebuilding but there is a huge amount of effort going on at the Department for Communities and Local Government at the moment looking at how this process works and will stick. You will hear a lot about commissioning should we get Tories or Liberal Democrats back into government [and] maybe even if we get Labour in government over the next five years.”

As for the Conservatives’ promise to extend “right to buy” to tenants of housing associations, Keable suggested this was an overt attempt “to win the blue collar vote,” in much the same way as the original policy of the Thatcher Government in the 1980s.

 “It’s an interesting policy and if the Tories get in that will be a big, central plank of theirs delivered over the next five years,” he said.

 Whichever way new homes are delivered, they are unlikely to be built in big numbers on the green belt, areas set aside for open space, agriculture, or forestry where urban development is prohibited Both the Conservatives and the Liberal Democrats have promised “no review” of the prevailing presumption against development on the green belt, while Labour didn’t mention the green belt in their platform.

 Words by Doug Morrison,  freelance writer.