In the UK, the average house costs eight times the average income. Wages have stagnated, house prices have exploded. A whole generation can no longer afford to buy somewhere to live.
IF spent a month collaborating with Homes England, part of the UK government with a mission to intervene in the housing market and radically increase the number of homes being built. That means going from 220,000 to 300,000 new homes a year by 2025.
Together, we researched and prototyped data services that can help SME developers build more homes, in the right places. Homes England covers all of England outside London; they collect data from lots of different places, and they could use it to fulfill their strategic aims… But how do you do that in ways that are both sustainable and ethical? How do we make sure that the technologies built are in service to the largest number of people?
This project was aimed at finding the demand for data from SMEs, which in turn would support Homes England’s strategic goals. While making Homes England a truly transparent and accountable government agency is rightly a part of their data strategy, we took a slightly different approach in this project, than just focusing on opening up data for the sake of transparency. Our focus was on prototyping tools that SMEs would use to build more homes.
Access to data can help SMEs
One of the things we found in research with SME builders outside London was that data services can address information asymmetry between them and big builders. The big construction companies, who occupy most of the construction market in the UK, often have in-house data specialists who distil risks and opportunities into reports. By contrast, SMEs often don’t find out about important things, like land opening up, until it’s too late. They’re specialist builders, rarely data enthusiasts. But they see the benefit of having access to this information - as long as it’s in a format they can use.
We found that, to have the effect they seek, Homes England will need to make high-quality data available in ways users can understand. This can mean different things, though. It could mean providing access to data in a machine-readable format, for third parties to build on. Transport for London has done this, allowing apps like Citymapper to use their data. It could also mean developing products and services on top of the data. Property portal Rightmove has done this to give business’ access to insights and analytics through its data services.
Better use of data can break down barriers for smaller developers
After interviewing people who work in the housing sector, we identified barriers for SME developers. Drawing on those insights, we prototyped four opportunity areas for new data services.
Widening access to information on property demand
Understanding demand is the first step in property development. At the moment, this is a needlessly opaque process, which slows down building homes. One house builder told us they “trawl through local plans” to find out what’s needed. Another developer described the difficult process of convincing funders that the opportunities they had found were profitable. The lack of transparency over demand also prevents third sector and community groups influencing what type of homes are built in their local area.
Building data services that widen access to information about demand for properties would provide SME developers with evidence for funding applications and give them the tools they need to match the types of homes they build to local market demand.
Making land value more transparent
Finding available land and assessing its value is another difficulty for SME developers. Anna Powell-Smith, creator of Who Owns England, talked about how hard it is to find information about government disposal of land and ownership. One SME developer said that the larger developers often offer higher prices for land to muscle out smaller competitors, then negotiate the price down behind closed doors.
To make the process of finding suitable sites more transparent, and remove the current dependence on land agents and other opaque processes, Homes England could give SMEs access to up-to-date data on appropriate sites. If this was connected to data on land value, use, ownership and estimated development costs, it would radically change how SME developers find and value land.
A simpler, faster planning process for home building
Planning can be long and unpredictable. It has huge implications for whether properties get built. That makes it hard for SMEs to commit to new developments and get funding.
At the moment, Local Authorities lack the data to assess what’s viable on a site. Large developers with more data and support from consultants can more easily negotiate down the requirements for affordable housing. Once planning permission is granted, it’s hard to keep track of the building that’s actually taking place, so it’s difficult to monitor who’s holding on to undeveloped land as an investment opportunity.
IF identified that Homes England could make good use of its national reach to offer data services that make it easy to compare what’s viable on a site, pricing and how long planning applications might take, supporting both Local Authorities and SME developers.
We prototyped a service where Homes England could share data about which kinds of developments across England do (or don’t) get planning permission, and which developments end up being built. Ultimately, this kind of data could help make Local Authorities’ planning processes faster and less subjective, reducing risk for both developers and investors.
More information means better, more sustainable homes
Smaller developers have less accurate data than large developers do about how much a property development will cost. This makes it harder to assess land value, convince investors and make decisions about which materials to use.
IF found that, as Homes England is involved in so many developments across the country, it is uniquely placed to collect and share data on development costs, materials, construction methods and timescales. Homes England is committed to improving the quality of homes in the UK.
Making this data available would help SMEs better understand costs, get funding faster and hold suppliers to account. It could also enable services that help local residents influence how future homes are built.
It’s worth adding that this is a use of data that could not only stimulate building of homes, but could significantly improve people’s quality of life. The UK’s poor housing stock currently, together with the cost of heating, does real harm. If technologists can help change that, it’s a job worth doing.
Moving beyond data transparency
The SME developers we spoke to were excited about the new data services that Homes England could provide and welcomed opportunities for more transparency across the housing sector to help them build better quality homes.
The opportunities IF identified should be based on infrastructure that allows for different models of data sharing. So we also prototyped some patterns for how these permissions could work. Services must be designed in a way that gives people agency over data about them, with real accountability mechanisms in place.
If done right, ethical data services could have a hugely positive impact on the UK housing market, helping more homes get built, faster. The right kinds of services could reduce the barriers to entry for SMEs, speed up the planning process, engage local communities and support the building of better quality homes.
Thanks to María Izquierdo, Ella Fitzsimmons and Jess Holland for their contributions to this post.