Prime minister Andy Burnham’s flagship council housebuilding plan risks becoming a “postcode lottery” due to shortages of available public land in the right locations, according to new analysis by specialist lender Together, which argues that development finance will be essential to close the gap.
Labour has pledged to oversee the biggest council housebuilding programme since the postwar period, using vacant land to reduce costs.
However, analysis by Together into data provided by property data platform Searchland reveals publicly-owned brownfield land in England has capacity for at most 187,000 to 207,000 homes. That falls short of two-thirds of the 300,000 social and affordable home programme Labour has previously announced, and the figure doesn’t account for whether each site is genuinely deliverable.
The state does not own enough registered land to build the programme on public land alone. A third or more would still have to come from land bought at its current market value, and development finance will play a central role in making that happen.
What public land there is remains heavily concentrated. A handful of authorities, led by Birmingham with 185 sites and capacity for around 11,500 homes, account for a large share of the national total. For most of the country, vacant public land is scarce. In around two-thirds of the 20 areas with the deepest housing shortfalls, there is little or no significant public land to build on.
Communities in these areas carry some of the largest deficits in the country, yet whether Burnham’s lever can help them depends almost entirely on which council boundary they happen to sit inside. Much of the largest public landholding sits in authorities that are already meeting or beating their housing targets, among them Leeds, Wandsworth, Waltham Forest, Newcastle and Nottingham. Only five authorities, Birmingham, Bristol, Bradford, Lewisham and Kirklees, combine a serious deficit with a serious public land holding.
“Building on vacant public land is a sensible idea, but our analysis shows it can only ever be part of the answer,” said Ryan Etchells, chief commercial officer at Together. “There isn’t enough public land to deliver a programme this size, and that’s before considering that the places with the greatest need tend to have the least land. As it stands, whether this pledge reaches your community is close to a postcode lottery.
“The areas falling furthest behind won’t be rescued by land the state happens to own. They need sites to be assembled and bought, existing land intensified, and the wider public estate brought into play, and all of that needs finance that moves quickly and understands complex, non-standard sites. That is precisely the gap specialist lenders like Together exist to fill.
“If the ambition is genuinely national, the plan has to look well beyond vacant public land, otherwise many of the families on today’s waiting lists will be left exactly where they are.”
A programme built on vacant public land is, by its nature, a programme of thousands of small, dispersed brownfield plots, typically ranging from one to 50 homes, the kind of site volume housebuilders tend to overlook. Homes on public land will overwhelmingly be delivered by SME builders and regional contractors, the type of housebuilder that drove the post-war council-house boom.
This is where development finance becomes vital. After planning, access to finance is the single biggest constraint on SME housebuilders. Mainstream banks retreated from SME development lending after 2008 and rely on rigid, one-size-fits-all criteria that cannot price the realities of public brownfield land, including:
- contamination and remediation
- non-standard construction
- access and ransom strips
- phased build-out and planning risk
A small builder typically has capital tied up in just one or two schemes, so a delay or an automated rejection can stall the business entirely.
“Making more public land available is an important part of boosting housing supply, but land alone doesn’t build homes,” Etchells added. “Developers need access to funding that can keep pace with the realities of a project, whether that’s navigating planning delays, drawing down finance in stages or moving quickly when a site becomes available.
“In many high-demand areas, developers also need acquisition finance to bring sites together before a scheme can get off the ground. These are often complex opportunities that don’t fit a standard lending model, which is why specialist lenders have such an important role to play. If the funding isn’t there, even the most promising sites can struggle to move from allocation to construction.”
