Narrowing the Have and Have Not divide through a train and self-buiild scheme

The pandemic will mean less demand for retail and office space. Large swathes of the population may be permanently displaced from their roles in the service sectors. With the U.K’s departure from the EU, labour for construction will be less available. These factors combined with a crisis in the belief in the fairness of capitalism and the desperate need for more homes presents the U.K. with an opportunity. To give the have not’s capital through the conversion of Underused land to homes as part of a huge ‘train and self-build’ scheme. Construction is not a popular career choice amongst younger generations. Having a stake in what you are building in the short term as well as skills and experience to earn in the long term could change this. As retail and office space is converted to residential, construction workers should be offered capital in the form of a small percentage of a home that they helped to build. Tying a person’s efforts to a home makes them stakeholders and gives them reason to produce high quality work whilst training. Developments above a certain size will be obligated to offer a percentage of the homes that they are building to this scheme, in a similar way to how Housing Associations are given a percentage of some developments. House builders rely largely on sub-contractors for labour so new contracting methods that account for time on specific developments will be required. Modern technology can make this easy, with swipe in and swipe out of sites being mandatory as part of the scheme. Skills tests at the end of a package of learning will be mandatory to avoid members being used as unskilled labour. Those applying for the scheme must have been furloughed, unemployed, from a disadvantaged background and without capital or the means to obtain it. They will need to qualify in either one high-skilled (plumbing or electrics) and one low-skilled trade (dry-lining, carpentry, ceramics, painting and decorating, scaffolding, ground works, demolition), or three low-skilled trades. The requirement to multi-skill will increase the number of skilled individuals and may reduce dependencies on additional sub-contractors, anecdotally the cause of much delay in construction. Planning permission must be revised. The guiding principle should be ‘is there any reason that this cannot be used for residential’? For example, some land is reserved for light industrial units, such as warehousing or storage space often near prime locations such as transport hubs in cities. This is overly restrictive. These sites should be converted to sandwich buildings. The bottom two or three layers could be reserved for commercial use. The next layers, for parking. Floors above this, of which there should be many, for homes. Having planning permission denied for virgin builds or for creating sandwich buildings should be subject to rapid independent, challenge. A tax on any land commercially owned that is zoned for home development but that is idle should be levied. Its rate should increase with every year that the land sits idle, irrespective of ownership. Local councils should be offered a portion of stamp duty that is yielded from any new development. This percentage should be linked to the amount of time taken to make a planning decision. The longer they take to give planning permission, the lower their percentage. These measures incentivise both parties to make planning decisions quickly, a bottleneck identified by developers. Currently, construction takes place, by and large during the working week, with weekend work limited. The construction industry should move to the Oil Rig model. A skilled construction worker can travel and work for three weeks, with a mandatory break afterwards, regulated by a mandatory swipe card. This would rely on a change to allow work on weekends. A Saturday could be limited to 10am-6pm and Sunday from 11am-5pm. These changes, alongside flexible, mobile accommodation allows labour to move freely throughout the country reducing long daily or weekly commutes. Someone beginning work at 16, could work for 53 years at the current state retirement age. But the average length of a mortgage is 25 years. If the norm for mortgages was linked to the difference between age and state retirement age deposits could be made smaller, which might give have not’s a better chance of gaining a mortgage. The average salary multiple could change to something more realistic in the current market. The government should push its lenders to do this. In return it could accept some limited risk that comes with smaller deposits. The ‘train and self-build’ scheme should offer 2.5% of the value of a property, with this being sufficient deposit to qualify for a longer mortgages. The government could accept the risk on another 2.5% for a limited period. Stamp duty is a punitive tax that presents a barrier to a dynamic labour market. Individuals should be allowed to pay this off either over a period of time or from the profits of the eventual sale of their property, with a suitable interest rate applied that encourages them to pay this down quickly. Implementing the above will require political courage. Home owners typically vote Conservative. Renters, especially in the social sector, Labour. This scheme might push prices down for mainly Conservative home owners. But it would create more home owners. So whilst there may be some financial pain for the current Conservative have’s, this may convert many more have not’s, to voting Conservative. The UK has needed to build more homes for decades but no government has taken sufficient action to rectify the current situation. The aftermath of the pandemic will provide space for homes as demand retail and office space lessens.

A ‘Train and self-build’ scheme creates stakeholders and gives them capital and skills simultaneously. Providing easier access to mortgages, changing stamp duty and allowing a longer working week allows for a more dynamic property sector. A courageous government will see that turning more have not’s into have’s is the biggest opportunity presented by the pandemic.

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