Last week I was chairing our Labour Party Conference breakfast fringe event, hosted jointly with the British Property Federation (BPF) at Bridgewater Hall in Manchester, writes Dan Mitchell.
With an experienced and influential panel that included Councillor Paul Watson, Leader of Sunderland City Council and Vice-Chair of the Local Government Association; Bill Hughes of Legal & General and President of the BPF and David Partridge of Argent and an audience consisting of over 100 delegates from across the property sector, I knew that my question of ‘What do we want the next Government to do to help our Sector?’ was going to inform an interesting conversation.
I began by looking back five years to 2009 and the run up to the 2010 General Election. The BPF Property data 2010 report noted that rents were falling, with office rentals lower than 10 years previously, lease lengths falling from an average of 8.7 to 5.9 years and there was a £500 billion fall in commercial property values between 2008 and 2009. The outlook for the property sector was fragile to say the least.
Bring us back to the present and many of these sectors have seen activity rapidly return to pre-recession levels. Across Manchester City Centre we all pass numerous projects on site every day, great news for the industry as investor confidence appears to have returned, but it begs the question to what extent has this growth been underpinned by intervention? Initiatives such as City Deals, Enterprise Zones, Regional Growth Fund and Tax Increment Financing are
important stimulants but have they really delivered and how can they be improved? After the referendum decision in Scotland, there are promises of more devolved powers. What are the opportunities for the UK regions?
So, back to the question, reflecting on all of this, what would our panel of speakers suggest to the next Government?
Empowerment for and support from Local Authorities was a call made by all three of our Panel Members. All felt Local Authorities know their locations, their economies and the opportunities. They therefore need to be driving their own economies, using this local knowledge to inform their approach and assisting the industry in recycling sites, with Bill Hughes even used the phrase, ‘the UK is not over-developed, it is under-demolished.’ Cllr Paul Watson felt there could be a strong opportunity to de-risk the planning system through closer cross sector working and perhaps more impetus generated by Council-led Land Trusts to drive the delivery of surplus land redevelopment. A skills shortage within the planning system is however a stumbling block to this call acknowledged by Hughes, that would need t be tackled in tandem.
Both Hughes and David Partridge were firmly of the opinion that private sector investment houses are far more interested in residential development and more broadly, social infrastructure investment opportunities today. Both felt that this is clearly where Government must take action, to ensure delivery be this via calling for ‘a stamp duty holiday for those over 65yrs in order to encourage them to free up their larger family homes’ (Hughes) and the creation of a use class for the Private Rented Sector (Partridge). Two further suggestions from David were the use of TIF funding mechanisms to support up-front costs involved in social infrastructure delivery and stimulate and support urban and new settlement growth and a plea to not introduce rental controls.
Opening the discussion up to the floor neither I nor our assembled Panel were surprised to see the PRS debate become the first hotly contested point, by our assembled audience. It’s a particularly prevalent element of development within Manchester and there has been a strong degree of scepticism around the quality and impact a surge in PRS might have in our city.
When challenged on this Bill and David were bullish. ‘The UK needs to be weaned off an over dependency on house price inflation. It has reached unprecedented levels over the last 25 years and is bad for Britain’ offered Bill. The Panel agreed that PRS is one solution to the housing crisis, it is not a panacea, and it is not currently assisting affordability because it is the wrong type of product being delivered. “With a lifespan of 25 years, you need a PRS building to work for 25 years,” said Partridge. “Quality is therefore paramount. It needs to be robust and considered. It needs to make occupants happy so they stay longer.”
The second key topic from our assembled property audience was that of the role of LEPs. Again our Panel were largely in agreement that the LEP’s role is a crucial one, in order to drive meaningful delivery at a local level. Watson in particular, urged Local Authorities to embrace the entrepreneurialism of LEPs and their key participants.
This was only one of many discussions around the development industry and specifically the residential sector at this year’s Labour Party Conference, but I was personally delighted to see such strength and fervour within last week’s Q&A. Housing delivery is a major challenge for any Government, whatever colour and to have it high on the agenda is a great sign at this stage. I was also personally pleased to hear a number of the key points made reflect the ideas we
have been lobbying Government, Politicians and the industry with over the last few months. I am therefore looking forward to taking our core calls forward canvassing and lobbying key figures in the industry.
You can view our manifesto for economic delivery through development here.
This article was originally published through Place Resources