Imagine building Buckingham Palace today.
We will need: 39 acres in prime Central London, enough land between us and the neighbours to avoid our bedrooms looking into theirs, a road network to cope with the traffic and planning permission from Westminster Council.
Now, imagine we wanted to build our new Buckingham Palace on Peckham High Street.
Most of the land on Peckham High Street is owned in freehold titles of less than 0.1 acres. We therefore need 390 individual landlords to sell their land to us to assemble the site. But since that’s never going to happen, I have a better idea – we could get all of those freeholders to apply for the planning permission themselves together.
If they worked together, they could pull this off quicker than you can say Peckingham PalaceTM.
This thought experiment might sound surreal and yet it shows the underlying cause of the housing crisis in all its glory. Namely, that there are too many owners in the marketplace and hardly anyone works with their neighbours. My economics professor used to call this market failure. I call it missed opportunities.
As a property company owner, everyday I salivate over amazing sites all across London. Parcels of land in different ownerships that could be redeveloped into fantasy developments – higgledy-piggledy high street parades that could be turned into new sky-high residential towers, new retail and restaurant complexes, new shiny leisure centres. The sky is literally the limit.
The problem is that these developments will only get off the ground if the different neighbouring owners were to work together. And oddly, they hardly ever do.
For that to happen, teams of landlords would have to all club together to apply for planning permission and the risks are just too high. What if the application gets refused? How will the landlords split the architects’ fees? How do they know what to even apply for? The reasons not to do anything are compelling. The rewards imaginary. And so they become decided only to be undecided, resolved to be irresolute, adamant for drift – Churchill’s words, not mine.
Councils in recent years have started waking up to this. They have created development Opportunity Areas and told landlords that they actively want to see redevelopment in certain areas. This is a great start, but why stop there?
What if Councils went further and employed architects to draw up outline schemes on parcels of land and then actively encouraged the different owners to work together to apply for these new schemes? What if instead of creating Opportunity Areas in confined areas, Councils made every high street in London an Opportunity Area and told landlords what development heights and use classes they wanted to see? What if Councils created team structures and made pre-applications free, so that groups of landlords could be guided through the process of applying for planning permission together and shown what to do with their land thereafter?
London needs 42,000 new homes every year. There’s as much chance of that happening at the moment as being struck by lightning three times while picking the winning lottery numbers. Time Councils got proactive.
An edited version of this article was published on Conservative Home