The UK housing market has reached a crisis point. The availability of new housing is severely lagging behind demand, and the rising cost of housing disproportionately affects those on lower incomes.
Recent economic statements have reminded us that repeated calls for meaningful planning reform, the most reliable guarantee of quicker and more housing supply, are not on the government’s radar.
A sensible next step, and one which is inherently less political than that of wholesale planning reform – see Michael Gove’s climbdown to backbench nimbyism as an indicator of sensitivity – is a closer look into how we can democratise the land market.
The UK’s land market is unusually oligopolistic in nature, where most of the large parcels of land available for development are controlled by a small number of investors and landholders. This market structure creates economic inefficiencies and reduces the supply of new homes, while making it difficult for smaller developers – who used to deliver a far greater share of new housing supply until the financial crash – to compete on an even playing field.
It is also wrapped in a layer of mystery, with land data generally opaque, fragmented and disparate, making it difficult for developers and local authorities to identify transaction opportunities.
Fundamentally, land market democratisation involves introducing measures to increase transparency, with a view to promoting both competition and collaboration where appropriate. These will supplement the suite of private market digital solutions already making their presence felt, such as VirginLand by Ringley – an outsourced site-finding department enabled by tech.
One easy win would be to build on the impressive work done by the Land Registry that created an in-depth, publicly available register of landowners. A sensible starting point, no doubt, but one that offers no real value when it comes to gauging the owner’s receptivity to sale. The government should look to work collaboratively with private companies which indeed have access to this data.
The industry should also work with the government to introduce rules that reduce the prevalence of opaque land sales. Off-market land sales are an important part of an active and functioning land market, but they should not necessitate a blurry legal process when it comes to developers with large pockets acquiring the land. There needs to be a tighter handle on large corporate lobbying groups, who are successfully lobbying councils to release land they shouldn’t be – greenbelt or parcels protected by policy, for example. Again, transparency is key here.
Democratising the land market also means having more publicly-owned land available for use. The government could do this by expanding land trusts, which would enable local communities, councils and third-sector organisations such as charities and housing associations to access under-utilised public land and develop it. It is also a case of enabling local authorities to better understand how to use their information, which is often held in silos and is fragmented, making it difficult to understand the opportunity for development or its commercial appeal for private developers.
Technology is the golden thread that weaves this all together. A truly democratised land market, where the power balance between SMEs and volume builders moves closer to equilibrium and where development is accelerated, can only be delivered through better transparency (and accountability), deeper insight, and a granular understanding of where development opportunities lie.
