Housing Market

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Title	Sustainable Communities - My Aunty Margaret!
Author	Sue Roaf, Professor of Architecture, Oxford Brookes University
Date Published	Building for a Future, Spring 2005

Sustainable communities: My Aunt Margaret

In 1914 my great aunt Margaret Law published a history of Bradford. One chapter described the buildings of the city. In it she bewailed the fact that the council could not stop developers building back to backs with four families in small courts fit only for one. She suggested that if each citizen could only make sure that their small corner of this beautiful country was in good order then we would, together, build a New Jerusalem in this green and pleasant land.

Around that time the heroic figures in the Planning movement, influenced by Sir Ebenezer Howard (1), were building Garden Cities, to bring together the economic and cultural advantages of both city and country living, with land ownership vested in the community, while at the same time discouraging metropolitan sprawl and industrial centralization. Letchworth was begun in 1903 and Welwyn Garden City in 1920.

In 2003 the Deputy Prime Minister launched his ‘Sustainable Communities: Building for the Future’ plan on the 5th February. The focus of this report was to address the housing shortages in Britain by

• Accelerating the provision of housing (largely in new Greenfield developments like the Thames Gateway, London-Stansted-Cambridge corridor, Ashford, and Milton Keynes-South Midlands).
• Providing affordable Housing. £5 billion has been allocated for the provision of affordable housing over the next three years.
• Tackling Homelessness. Including ensuring ending the use of bed and breakfast hostels for homeless families by March 2004.

The key strategies of the ODPM Sustainable Communities Plan were to:

• Address low demand and abandonment. Around one million homes in parts of the North and Midlands are suffering from low demand and abandonment.
• Make all Council housing ‘Decent’.
• Promote ‘Liveability’ in communities with cleaner streets, improved parks and better public spaces.
• Protecting the countryside. The Plan outlines how land will be used more effectively. The majority of new housing will be on previously developed land, rather than on Greenfield sites (what about the areas outlined above ?).

Behind this agenda we also have popular planning drivers like the idea of the ‘Compact City’ that encourages the increasing densification of urban areas, apparently without limit. An enthusiastic supporter of ‘densification’ is Lord Rogers, Sustainability Guru for the great London Authority. In his Guardian article of the 29th January 2005(2) he made a plea to the British Public to empower its civic leaders to create beautiful cities, like those of Barcelona, Venice, Tuscan hill top towns or, and he expressed a desire to make the Thames gateway like Manhattan or Barcelona, designed by ‘exceptional European architects’. He urged planners and politicians to ‘to take a comprehensive but sensitive approach, evaluating existing land, communities and transport against what could be’, and he regrets that our most precious sites are ‘being defiled by alien low- and high-rise dolls houses, occasionally interrupted by Dan Dare steel and glass towers with no regard for context or relationship with their surroundings’(3).

On the ground ‘Compact’ urban development appears to mean letting developers put as many dwelling as they can on every new site, regardless of the existing communities own wishes, as local residents in Jericho, Oxford, know. They are desperately trying to save the historic canal boatyard area, that figured so beautifully in Philip Pullman’s Dark Materials trilogy. The desire for ‘densification’ is now commonly used by planners and developers alike in justifying five and six story developments in areas of existing two and three storey communities. This may be a good thing but in some cases Planning Guidance is being used as a tool to destroy the character of local communities, not protect it.

ODPM strategies take no account whatsoever of key drivers like Climate Change and rapidly depleting energy resources. Climate Change is happening faster than anyone predicted. It is getting warmer, sea levels are rising and there are more extreme storms. Rainfall in the summer the south east of England is predicted to be around 50% less by c. 2080. In July 2003 there was insufficient water in the South East for the basic requirements of the existing houses. Catastrophic floods are becoming common. Over the next 75 years, 2 million more people could be at high risk of river and coastal flooding.
Despite all the warnings, the planning departments of 56% of the councils in England and Wales have allowed properties to be built in flood hazard areas. During 2003 there were 600 developments, mostly residential, many major, permitted on flood plains in England and Wales against the advice of the Environment Agency. It is estimated that more than 200,000 homes in Britain are already uninsurable due to the flood hazard. The UK is unusual in offering flood cover as a standard feature of household and most business policies. Unlike much of Europe and the rest of the world, thanks to an interim guaranteed availability of flood insurance, cover will be available to 99% of the UK's 23.5m householders until 2007. After that date, the number of uninsurable properties could increase substantially. Meanwhile the government is proceeding with developments in Thames Gateway where the housing density will be as high as 200 dwellings per hectare in places, creating such a high concentration of exposure in one small area that reinsurers may baulk at the accumulation of risk (4).

Peak Oil is another key driver, when global oil output begins to decline and demand continues on its exponential rise. Matt Simmons, the influential US Energy Investment Banker(5), thinks this is already happening. He is not alone. Many geologists expect that 2005 will be the last year of cheap-oil bonanza, while the oil industry indicates a “seemingly unbridgeable supply-demand gap opening up after 2007� which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012 (6). And voices around the world are joining the alarm call (7). You should be alarmed too. What was your last quarterly gas and electric bill ? Could you afford to pay it when it doubles and trebles on a state pension ? Sustainability is getting personal.

What would I include in a Sustainable Communities Plan. Certainly not millions of new houses on Greenfield sites where people will have to drive many miles to work on petrol they may not be able to afford in ten years time. Certainly not 300,000 houses on the coastal flood plains of the Thames Gateway that will flood sooner or later. I would give the Environment Agency some real teeth to help them protect communities from planners and developers.

I would batten down the hatches, move work to where the homes and people are, forbid new developments on, or near, any flood plain, tighten up insulation requirements and refurbish all council homes, not with fancy bathroom tiles, but with major levels of insulation, draft-proofing and good windows so people in them can survive when the lights do go out, which they increasingly will. I would bring in a law tomorrow to make every suitable building, old or new, install solar hot water systems and put in place real incentives for using photovoltaics (8). I would make it difficult to leave houses empty like the 600,000 estimated to be so in the UK today. I would make it a requirement for every local council to develop a good model of the current capacity of their region, in terms of water, energy, sewage and transport to support current and future developments and I would set about shoring up the UK’s invisible infra-structures to enable us to survive in the difficult decades ahead (9).

In the heroic age of Planning, a hundred years ago, the Planning System was developed to improve the lot of the ordinary citizen, to help build a New Jerusalem in England’s green and pleasant land. It now increasingly appears, to ordinary Joe’s like me, to be geared to generating profit for developers at the expense of local communities. What do I think about the ODPM’s vision ?

Sustainable Communities?...My Aunt Margaret !

Sources

(1) Sir Ebenezer Howard (1898). Tomorrow: A Peaceful Path to Social Reform.

(2) Lord Rogers (2005). Are Architects the Vandals ? What Works for Buildings in the 21st Century ?, The Guardian, 29th January, p.21.

(3) Rogers promotes a contextless glass shard in Building Design, 9th May 2003, p.1.

(4) David Crichton, personal communication.

(5) http://www.simmonsco-intl.com/research.aspx?Type=msspeeches

(6) http://www.lifeaftertheoilcrash.net/

(7) http://www.peakoil.net/

(8) www.solarcities.co.uk . Oxford is hosting the 2006 2nd International Solar Cities Congress, where we hope Mayors from over 50 cities around the world will come and share their experiences of trying to build real foundations for the sustainable cities of the future. Join us there !

(9) Roaf, S., D. Crichton and F. Nicol (2005). Adapting Buildings and Cities for Climate Change, Architectural press.

Sue Roaf

Sue Roaf is Professor of Architecture at Oxford Brookes University, owner of the world-famous Ecohouse, author of 'EcoHouse 2'; 'Closing the Loop: Benchmarks for Sustainable Building', and 'Adapting Buildings and Cities for Climate Change'.

Sue's current projects include the Oxford Solar Initiative, is a Freeman of the City of London, a fellow of the Royal Society of Arts, and is a Liberal Democrats Councillor.

Title	Are we Heading for a Crash?
Author	Philip Thornton, Economics Correspondent
Date Published	The Independent, 3 April 2004

• The average house now costs £151,467
• This is 5.2 times the average salary
• House prices are rising by 18.5 per cent a year
• Pay levels are rising by 3.6 per cent
• Britain's current mortgage debt is running at £783,000,000,000

The average price of a house in Britain rose to more than £150,000 for the first time last month, as a fresh rise in values triggered renewed fears that Britain was in the grip of an unsustainable speculative housing boom.

Figures yesterday from Halifax, the UK's biggest mortgage lender, also showed that the value of a typical home rose by 2.2 per cent or £3,300 in March. If the rise continues, the cost of an average family home will increase by £39,600 this year, equivalent to an extra household post-tax salary of £28,065. The rise took the annual growth rate to 18.5 per cent, its highest since September and the fourth consecutive month that the annual inflation rate has increased. This will ring alarm bells at the Bank of England, which been insisting for some time that the housing market will stagnate within two years. Analysts believe the strength of this week's housing figures will force it to raise rates to engineer a slowdown.

Just two years ago, the market broke through £100,000 and house prices have doubled in less than five years. But analysts believe that, if anything, prices are likely to rise to even loftier heights within months. Yesterday's figures rounded off a week of data that can have left few people in any doubt that the housing market is in the grips of yet another price boom.

On Monday, the Bank of England said new mortgage lending rose at its fastest rate on record. On Wednesday, Nationwide building society said prices were rising at their fastest rate for 18 months, and on Thursday, the Bank said mortgage equity withdrawal (loans not used to buy a home) hit an all-time high last year.

The flurry of figures has led to the inevitable warnings that the UK is suffering from a speculative house price bubble that will end in a property crash as it did in the late 1980s. But the mortgage industry and many independent analysts believe that today's housing market has solid foundations.

Martin Ellis, chief economist at Halifax, said £150,000 was "just another landmark". He added: "We have seen this sharp rise in prices as the market has been underpinned by a combination of strong demand, full employment, falling unemployment and interest rates remaining low, and a supply side of the market that is still tight."

The latest figures from the Royal Institution of Chartered Surveyors showed the number of homes on the market was close to its all-time low. "There is a lot of interest from buyers and they are chasing after not many properties," Mr Ellis said. "That is contributing to the ongoing strength in house prices."

Experts say the boom has been an adjustment to a new world of low interest rates that has made high prices affordable, first in the South and then, as prices surged there, in regions where houses were still affordable. And property has offered better returns to investors worried about their retirement than low-rate bank accounts or a volatile stock market. There is a vigorous debate at the highest levels of the Bank of England over whether the price boom will end with a bang or a whimper. The governor, Mervyn King, and most of the Bank's monetary policy committee that sets interest rates, believe willingness to borrow large sums to buy a home is rational, given the economic backdrop.

But one deputy governor, the former banking regulator Sir Andrew Large, believes the boom could turn to bust unless interest rates are raised quickly, perhaps as soon as next week, to "jolt" consumers out of the borrowing binge. Some commentators believe that present house values are unsustainable and the only question is when, not if, the market will crash.

Analysts such as the stockbroker Durlacher believe the record debt, combined with rising interest rates and declining rents, will trigger a 30 per cent price crash. It said the market has the "classic features" of a speculative bubble, pointing - admittedly tongue in cheek - to the fact that the number of property-related TV programmes has still not peaked.

And if any more evidence was needed of people's desire to get a share of the housing market, Newcastle building society yesterday launched a new account that offers a return directly linked to the Halifax house price index.

Philip Thornton

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