John Milne

I thank my hon. Friend, who makes a very good point. The system is working almost to the reverse of what was intended. In my constituency of Horsham many people either work for London businesses or perhaps have traded down from a more expensive London property. From their point of view, Horsham represents excellent value. The official affordability ratio does not reflect real working conditions in Horsham for locals, and therefore overstates local targets. Local councillors all strive to get the best for their communities, but the way we receive targets under the standard method destroys our negotiating position with developers. Developers are not stupid. They can work out as well as anyone else how many sites are needed to meet our targets. They have no need to concede on civil amenities or on affordable housing because they know that, at the end of the day, they have got the council over a barrel. I have no issue with a private developer seeking to make a profit—what else do we expect them to do?—but do not rely on them to do social planning. In areas like Horsham, years of free market ideology have turned councils into mere editors of private developer proposals. We build on greenfield sites because they are the only ones that get presented. There is literally nothing else to choose from in Horsham. The free market approach to affordability does not work for the housing market. Competition has driven prices up, not down. In Horsham we would arguably be better off if we granted a monopoly to one single developer and let them push down local land prices. To add insult to injury, we also have the standard method’s bullying friend, the housing delivery test. I am not sure whether there ever was a carrot in this process, but the HDT is definitely the stick. Failure to meet targets can ultimately result in losing local control over planning altogether. It is a Catch-22 situation: the developer controls the rate of delivery, but the council pays the price if targets slip. Heads they win, tails we lose. In fact, the single biggest factor that influences prices has nothing to do with house building. It is availability of credit. If interest rates were to double tomorrow, the price of a mortgage would soar and we would see a house price crash, yet all that would happen without a single new home being built. A succession of policies under the Conservatives only served to make the problem worse, not better. Subsidies such as Help to Buy or stamp duty holidays simply inflated prices further, like a giant Ponzi scheme. The market adjusts, and the subsidy ends up in the pockets of developers until the next upward turn in the spiral. Therefore, any analysis of UK house building must take into account the key role of finance. Since Thatcher, houses have come to be seen not simply as homes but as investments. In line with that, the explosion of the buy-to-let market in the 1990s correlates suspiciously closely with overall house price inflation. Older generations benefited from decades of property asset inflation, but today it is getting harder and harder to board that train. Putting all that together, it is clear that the standard method is getting its social sums all wrong.