In 2015 the government pledged to create one million new homes by 2020 to close Britain’s “homes deficit”, which works out at 200,000 each year. However, statistics showed that just 189,650 new homes were added to the housing stock in the first year, a shortfall of more than 10,000. Recognising that it was on course to miss its promise, in February 2017 the government introduced “bold new plans to fix the broken housing market” which include measures to reduce the obstacles to house building to help local authorities, developers and SME builders build the homes Britain needs.

These measures seem to be having a positive effect as government figures released in November 2017 show that 217,350 homes were added to the housing stock in the past year, the highest since 2007-08 and 15 per cent up on last year. Of these, 183,570 were new builds, up 12 per cent on last year and up 55 per cent on four years ago.

However, this growth needs to be sustained, and in October 2017 the Prime Minister met with representatives of large and small housing developers, housing associations and local government to discuss achieving a step change in the delivery of new homes. A wide range of issues were discussed including planning, SMEs, skills, retirement housing, modern methods of construction and ‘Help to Buy’. There was also discussion on green belt, landbanks, release of public land, boosting output from housing associations and local authorities. Those in attendance had an opportunity to set out their ideas and put forward the required actions they believe are needed to remove the barriers they face in building new homes.

As a result, the industry is hoping that the government will deliver further improvements in the upcoming Budget by:
providing certainty on the future of ‘Help to Buy’ post-2021;
removing barriers for SMEs, start-ups and specialist retirement builders so they can play their part in building more homes;
pushing forward proposals to improve the planning system and reduce delays in granting permissions that can add years to when builders can start projects.
Stewart Baseley, executive chairman of the Home Builders Federation, said:

“The housing crisis built up over several decades and will take many years to fix. Today’s statistics illustrate the huge progress being made, and the rapid rate at which builders have responded to positive measures from government to deliver more and more new homes. It is no coincidence that since reform of the planning system in 2012 and the introduction of the phenomenally successful Help to Buy scheme in 2013, housing supply has increase by a massive 74 per cent.

“The challenge now is to expand the number of housing suppliers delivering new homes. Government needs to help create the conditions for more specialist developers and smaller firms to invest and grow their output while continuing with the positive environment that has seen larger developers drive increases in supply.”

According to a Savills report from July 2017, there is a shortfall of more than 90,000 residential consents each year in areas of England where housing need is highest, which means we are not building enough homes in those areas.

The National Planning Policy Framework (NPPF) was introduced four years ago and has resulted in a 56 per cent increase in annual consents overall. However, it has not achieved its goal of responding to market signals and planning for homes in areas where affordability is the most stretched, which are London and the South East.

Following an assessment of each local authority in England on its post-NPPF Local Plan Status, its five-year land supply and how it performs on the proposed Housing Delivery Test (HDT), 10 local authorities in the South East have been identified as being particularly constrained in that they cannot demonstrate a five-year housing supply and have a housing affordability ratio greater than the national average. They all face the same challenge of lacking a deliverable pipeline of land for housing, exacerbated by land designated as Green Belt adding constraint to land supply.

The government announced in November 2017 that it will intervene to help the local authorities which have failed to get a local plan adopted both to identify more land for housing and to ensure those sites are delivered. The chancellor has also revealed he will use the budget to announce plans to build 300,000 homes every year. He will unveil billions of pounds of extra investment, plus new powers and planning rules to ensure construction firms start building on sites that already have planning permission. This is because the market for developed land “is broken” with 270,000 unbuilt residential planning permissions in London alone. He has vowed to do “whatever it takes” to get builders building.

In November 2017 the government announced that housing associations will be reclassified as private organisations which will boost housebuilding in this sector. With assets worth around £140 billion, housing associations are already run like big businesses, and by being free from the distractions of the public sector, they will be able to concentrate on developing innovative ways to build more homes.

London’s ‘housing crisis’

There continues to be a massive shortfall in the supply of homes in London. The latest housing figures calculated by City Hall through its Strategic Housing Market Assessment in October 2017 show that London needs to double its current rate of housebuilding to meet its housing needs. It states that London needs to build 66,000 new homes each year and suggests that 65 per cent of these must be “genuinely affordable housing” to fully satisfy requirements.

London mayor Sadiq Khan has urged “drastic government action” in the upcoming Budget to help ease the capital’s housing crisis and is calling on the government to significantly boost the funding and powers available to London and planning to meet the capital’s housing needs.

Sources:

https://www.gov.uk/government/news/pm-hosts-meeting-with-housebuilders-17-october-2017 https://www.house-builder.co.uk/news/housing-supply-hits-nine-year-high/ http://www.savills.co.uk/blog/article/218110/residential-property/how-planning-can-solve-the-housing…
https://www.house-builder.co.uk/news/london-mayor-urges-drastic-government-action-budget/ https://www.london.gov.uk/press-releases/mayoral/sadiq-calls-for-drastic-government-action https://www.house-builder.co.uk/news/government-reclassify-housing-associations-private/
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