Changing Rooms [BBC]

So-called property porn continues to make up a good percentage of the TV schedules 25 years after Changing Rooms started Building the Dream in a Location, Location, Location for The Poshest Sleepover in Millionaires’ Mansions, then over to The Great Interior Design Challenge, creating some Grand Designs, and moving on to daytime TV with rather lower budgets and more prosaic ambitions with House Doctor and Homes under the Hammer. 

More than one of these shows is approaching its silver anniversary, and you’re sure to have seen many of them – perhaps the daytime offerings too – and possibly even been addicted to one or two ?

In a roundabout way, they’re all selling the story that rising house prices are a Good Thing. The recent publication of the new London Plan ahead of the delayed Mayoral Election this week, presents a good opportunity to take the long view of the property market, and test this hypothesis in the real world.

Over the last two decades, there has been a 46% increase in the number of young people aged 20-34 living with their parents ^🔗

The evidence from first-time buyers is that spiralling prices are not such a good idea, especially post-COVID.  Excluded from markets such as our own local one, where one bedroom flats start around £250k, younger people have wondered how they’ll get on the mythical ‘property ladder’ for a while now.  Having been locked-down for much of the last year, they may be further destined to stay at home with mum’n’dad for the foreseeable, their best hope of ‘moving out’ may be to convert the garage to put a door between parents and the resultant substandard bedsit, or take a government help-to-buy mortgage – one that possibly helps stoke prices more than helps make housing affordable.  A poor show all round.

Housing Completions 2020 (MHCLG)

Classic economic theory says that rising prices stimulate the economy and increase house builder’s appetite to build.  The statistics don’t bear this out, with completions only just approaching the levels of 15-20 years ago, having been in the doldrums through periods of huge price inflation (with the real possibility of correlation), London being a particular “white spot” despite the highest price rises.  Hereabouts there are many factors at play, land availability being just one of them; the theory is too simplistic.

And what of this cash – where does it come from ?  From not spending in local shops and hospitality, or just adding to a debt mountain.  Neither are good for the real economy, locking away income for the foreseeable, and once on the ladder, the next step involves an increasing gap as prices rise, so any increased disposable income is – disposed of.  Best start saving now, or better move up quickly, perhaps by taking on an uncomfortable level of debt, before the price gets out of reach.

There remains a widespread assumption that existing homeowners subscribe to the benefits of rising prices.  Pragmatic Marxists might even tell you that releasing equity is a way to feedback escalating values to the proletariat (that’s your children, by the way).  But older voters (always sought after, unlike Auntie or marketers, forever chasing the young – discuss),  may soon get tired of their children still at home in their 30’s and even 40’s in London, as the direct effect of rising prices, and may start voting otherwise.  With the equivalent escalation of the average age of moving out, parents may become too old themselves, and disinclined to move at the time they might be able to release equity, and enjoy it.  Taking on what looks & feels like debt, in the form of equity release, probably having spent many years paying down a mortgage, may also be a bitter & alien pill, albeit perhaps a sensible one – for an economist.

Median London House Prices 1995-2020, sorted by 1995 price (ONS)

Hammersmith has the 5th highest median house prices in London.  It’s slipped one place since 1995, the graph adjacent is sorted by 1995 prices, when it was 4th, which may surprise you. 1995 prices are shown as the tiny blue bars.

Whatever nuances there are between H&F and anywhere else in town, property inflation has been huge in absolute terms, as shown in the second graphic, and much greater than elsewhere in the UK. H&F is middle of the range at 700%, explaining its 1 place fall in the above race, but the lowest priced boroughs in 1995, such as Hackney and Newham have seen the largest rises in a rather misplaced levelling-up exercise, many would call gentrification. Examine the demographics, and you’ll see the volume of younger people who have moved to those places on an affordability basis, if no other.  By contrast, average incomes have doubled in the same period but have been static in inflation-adjusted terms, meaning housing is 350% of the cost 25 years ago (c.f. ratios below), although interest rates are a lot lower if you’re borrowing the money. If you’d been what used to be called prudent – and saved for it – bad luck. Prudence was made homeless a while ago.

Percentage rise in London property by borough (ONS)

Our elders tell us that sky-high London property prices were ever so.  In the 50’s and 60’s, newbuilds were cheaper than period properties; in the age of the Space Race and (if only they’d known it) mid-century modernism, bright shiny and new was still less popular than ‘period’, and while affordability continued to decline, property aspirations remained as conservative and static as life’s DNA, a fact confirmed in the government’s recent Design Guide.

Planning for the future

In March of this year the government promised legislation to improve the supply of new homes, including legislation on building safety, rental reform, social housing – and an update to the planning system.

Following this, a government White Paper Planning for the Future proposed very significant changes to the planning process for public consultation which closed last week.

Changes to the planning procedure

At present, LBHF planning applications are assessed against the development policies in the LBHF Local Plan, in the London Plan, and in the government NPPF (National Planning Policy Framework). The White Paper proposes a new approach:  a new form of Local Plan, replacing the current format of more abstract policy guidance, by a format with a prescriptive system of development rules and a design code. The Local Plan would also include borough zone plans, which would identify three categories of development:

1. Growth areas where ‘substantial development’ would be suitable (similar, we suggest, to Earls Court, Old Oak Common etc)
2. Renewal areas such as existing built areas where development is encouraged (Hammersmith Town Centre, for example)
3. Protected areas like conservation and heritage areas, green belt and parkland.

Planning zones

In Growth and Renewal areas, proposals which are compliant with the Local Plan in height, use-type etc, and compliant with the government NPPF rules, would be effectively guaranteed an automatic outline planning consent, providing a level of certainty in site purchase values. At the next stage, a full planning application,  with detailed proposals, would be granted consent if the proposals comply with the more detailed rules and design codes of the Local Plan.

Community involvement

Public consultation in the planning process would be limited to the stage when the new Local Plan is put together by the local authority: community involvement would be excluded from full planning application stage, because (it is argued)  the application would be assessed against rules which have already been agreed through public consultation.

The intention is to establish a clear set of planning rules, which are in line with government policy, and have been agreed through community consultation; armed with these certainties applications would avoid the ambiguities of policy interpretation and community objection which (it is said) can delay the full planning application stage.

Design codes

CreateStreets – Bonnington Square

To illustrate examples of acceptable design and styling, and to provide a basis of resolution of design disagreements, Design Codes would form part of the Local Plan, and would be reviewed through public consultation when the new Local Plan is being put together. Design codes would be coordinated with the government’s National Design Guide, itself heavily influenced by the CreateStreets campaign and to the emerging National Model Design Code. To help the process, a chief officer for design and place-making would be appointed within each local authority.

Women’s Pioneer Housing, 227 Wood Lane

We reported in the Winter 2019-2020 newsletter that a proposal was being prepared by Architects Allford Hall Monaghan Morris for a new 25-storey tower block to the north of the A40 on Wood Lane.

The proposals replace Browning House, which is a 4-storey social housing block owned by Women’s Pioneer Housing (WPH). They are a housing association providing specialist accommodation.

An application has been submitted for a 29-storey tower, the proposals increasing the number of 2-person, 1-bedroom flats for WPH from 36 to 80, plus creating an additional 350 co-living accommodation units to be rented by developer HUB. These provide compact 1-person studio flats serviced by communal kitchens, living spaces and other facilities.

One justification for the 29-storey tower is the approval granted for the recently completed 34-storey ‘Ziggurat’ tower on the Imperial College White City campus site on the opposite side of Wood Lane. The latter was unpopular locally, but was approved on the basis that it was within the White City Regeneration Area. Tall buildings are only permitted under LBHF Planning Policy and the Mayor’s London Plan if they are considered ‘appropriate’,  and are within one of four development areas identified in the Local Plan.

The proposed tower is located outside of the White City development area, which raises the questions: how are applications decided for tall buildings located outside, but adjacent to the outer boundary of development areas ? And whether approvals within development areas can be used as precedent to justify nearby developments outside of the area, that would otherwise not comply with planning policy ?

The Hammersmith and Fulham Air Quality Commission report was adopted by the Council in November. The Commissioners, chaired by Rosemary Pettit, have recently asked the Council for an update on the Commission’s recommendations.

A total of 25 recommendations were presented to LBHF council, and 17 of these have been acted upon. These include an Urban Ecology Plan, an increase in diesel permit charges, a target of converting Council fleets to low-emission vehicles, and arboricultural and greening policies to be promoted in the Local Plan and Supplementary Planning Documents. Further details

At Government level, MPs from four influential committees will launch a joint inquiry into the scale and impact of UK air pollution. The Environmental Audit Committee, Environment, Food and Rural Affairs Committee, Health Committee and Transport Committee will consider mounting scientific evidence on the health and environmental effects of toxic air. The H&F Air Quality Commission report will be submitted to the inquiry.

At GLA level, the Mayor of London is to prioritise air quality in a new London Plan, expand use of electric buses, reduce vehicle ‘idling’ and review London’s Climate Change and Energy Strategy.

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