Barker tells Pennycook investors can play ‘critical role’ in ending housing ‘permacrisis’

The new government has promised to deliver the biggest increase in affordable housing supply in a generation. However, Mr Pennycook has previously said it was initially unlikely to meet the sector’s wish to build 90,000 social homes a year.

Dame Kate has written the letter in her role as chair of a commission established by thinktank Radix.

The letter also included a call to “recognise the critical role of institutional investment into housing”.

She wrote: “There are untapped pools of institutional finance which would be deployed in the English housing market given a more stable policy environment, including longer-term rent settlements for registered providers.

“A level playing field for tax, and clarity of vision about the delivery of future developments, will best deliver affordable housing requirements to high standards, alongside well-run rental stock.”

A number of large traditional housing associations have struck deals with institutional investors in the past few years, including Hyde’s tie-up with M&G.

However, Dame Kate added: “It may nevertheless prove difficult to drive up social rent supply, in particular, without increased government subsidy when the fiscal situation permits.”

The National Housing Federation has called on the government to introduce a 10-year rent settlement for the sector and repeated this plea to the new administration this month.

Dame Kate also called for the government to rethink the role of Homes England as a master developer, saying it should potentially work with development corporations. “Combined with Homes England [compulsory purchase order] powers, this would help tackle land value constraints and deliver the infrastructure and social housing needed,” she wrote.

“It would bring more sites to market at a quicker pace and speed up the rate of housebuilding within a controlled environment, especially as it could also boost the land supply for [small and medium-sized] builders.”

Dame Kate urged Mr Pennycook to halt the previous government’s plans for a new infrastructure levy, which would replace Section 106 and the Community Infrastructure Levy.

Instead, she said the current system should be reformed with “a particular goal to deliver more affordable housing”.

In her letter, Dame Kate also called for existing funding pots and processes to be streamlined. “Government could replace the wasteful and divisive short-term competitive funding model for small pots with longer-term, needs-based funding formulae,” she wrote.

Dame Kate’s most famous report, the Barker Review of Housing Supply, was published in 2004. It led to the government establishing the National Housing and Planning Advice Unit.

However, the unit was scrapped by the coalition government in 2010, in what is often referred to as the ‘bonfire of the quangos’.

In her letter, Dame Kate said the unit should be reinstated as “soon as possible”, as it had had a “positive impact” and the decision to shut it was “particularly frustrating”.

She also called for a cross-departmental “implementation unit” to be established at the Cabinet Office that would have “strategic leadership responsibility and ability to ensure policies are fully adopted across government departments”. 

She called for an independent review of the “metropolitan green belt” and a new strategic planning team within the Ministry of Housing, Communities and Local Government. 

In her maiden speech as chancellor earlier this month, Rachel Reeves vowed the government would “grasp the nettle of planning reform”.