Ministerial Contrasts

The new housing secretary and housing minister have acted to re-establish communication between the government and the principal housebuilding industry trade body as one of their first acts in their new roles.

Housing Today understands that both secretary of state Greg Clark and minister of state Marcus Jones have spoken already to Home Builders Federation executive chair Stewart Baseley, re-establishing contact that had been broken off entirely during Michael Gove’s nine-month tenure in charge of the Department for Levelling Up, Housing and Communities.

Gove, who was sacked by Boris Johnson last week as housing secretary in one of his last significant acts before being forced to announce his own resignation, had gone out of his way to distance himself from the housebuilder lobby during his time in the role. The HBF said it now hoped it could “re-set” the industry’s relationship with government in order to drive up housing supply.

He refused to speak or meet with the HBF entirely, was reported as describing major housebuilders as a “cartel”, and presided over a watering down of pro-development planning reforms and the introduction of £8bn-worth of charges designed to pay for fire safety upgrades to historic buildings.

Greg Clark’s contact with the HBF came after Stewart Baseley wrote to the new housing secretary in the hours after his appointment calling for him to reverse Gove’s proposed plan to introduce a £3bn levy on all planning permissions to pay for upgrades to at-risk high rises. Baseley said the charge would put at risk the delivery of up to 75,000 homes targeting low-income families.

Housebuilders have argued that while leasehold owners should be protected from the costs of fire safety improvements, that UK-based housebuilders should not therefore have to shoulder the full burden of the cost of improvements, given they are responsible for a minority of the buildings suffering problems, but that the costs should be spread across other parts of the industry that are also responsible, including product manufacturers and overseas-based developers.

An extract of the letter, seen by the Mail on Sunday, said: “Inevitably, the message conveyed by your predecessor was that if a company wishes to avoid its obligations and minimise its costs, it is best served by headquartering itself overseas or ignoring reasonable requests by Ministers,”

The poor relationship with government since Gove’s appointment has come during a period of increasing strain for smaller housebuilders, which have been more affected than larger builders by labour and material shortages and cost rises, and problems in the planning system. Delivery data has begun to indicate that housing output is slipping, while the government has appeared to distance itself from its manifesto pledge to build 300,000 homes a year

The news comes as information gathered by consultant Price Bailey, from the Insolvency Service, shows that the number of housebuilders going bust in the last year soared by 75% to a record high of 360.

Matt Howard, head of restructuring & recovery at Price Bailey, said that many listed housebuilders saw profits surge during the pandemic. But he added: “Their success has masked growing financial distress among smaller housebuilders. The number of new houses being built has dwindled since the pandemic and the collapse of smaller developers is making the Government’s target of 300,000 new homes a year by the mid-2020s look increasingly unobtainable.”

Clark’s appointment will have come as a welcome relief to the sector after Gove’s period in charge, with Clark seen as a business-friendly figure, who already has much experience of the issues, having had two stints at the department under previous guises. Clark was the planning minister who oversaw the drawing up of the developer-friendly National Planning Policy Framework, which embedded a presumption in favour of development in the planning system.

Gove, on the other hand, had forced developers to make £2bn of pledges to fix their own stock, going back 30 years, by using threats to drive developers out of business who didn’t play ball.

Neil Jefferson, managing director of the HBF said: “We welcome the upfront engagement from the Secretary of State and his team. The new appointments should enable a resetting of the relationship between industry and Government and positive relations are needed if we are to overcome the barriers to supply.”

Source: Housing Today