There are myriad reasons why we are in the midst of a housing crisis. The crux is that with an ever increasing population, we need to build more new homes of the type that people actually want to buy. That means delivering the right type of home in the locations where buyers actually want to live.
To meet the government’s aspirational new build target of 200,000 properties per year, plus an additional 200,000 starter homes over the four-year period leading up to 2020, a combined effort across the industry will be required. Making sure developers and lenders work more closely together is essential.
According to Department for Communities and Local Government house building statistics, starts in England totalled 136,320 in the 12 months to June 2015, slightly down on the previous year. More recently, for the quarter to the end of June, seasonally adjusted starts were estimated at 33,280, a 14% decrease over the previous quarter. More encouragingly, completions in the 12 months to June totalled 131,060 – an increase of 15% on the previous year’s total. Help to Buy schemes have added drive and support to the sector, with completions now well above 120,000 a year, with around 80% of those being for first-time buyers.
Lenders’ role
Government intervention in the market, including initiatives such as Help to Buy and the forthcoming Starter Homes scheme, may continue to play an important part in providing certainty for the market. Lenders also have a vital role to play in supporting the new build sector, including the expansion of small deposit lending such as Nationwide’s new whole of market product at 95% loan-to-value. We’ve seen more lenders enter the sector over the last 12 months and products have become more competitive. Lenders will need to forge closer relationships with developers and surveyors, to embrace the wave of innovation across the sector, as well as changes designed to speed up building programmes.
The private sector has accounted for just over 75% of all new build completions over the last 12 months. Many of these developers are near to, or exceeding, current build plans and taking reservations well ahead of final completion. For these developers to increase build levels, continued recruitment will be needed, including skilled onsite teams, planners, land buyers, marketing, site managers and much more. Many developers promote a career in housebuilding and have their own apprenticeship programmes, for which they should be commended.
Speeding up house building
There have been various initiatives introduced to accelerate new build programmes, yet many developers still report delays with obtaining planning consent as being a constant challenge, in particular where local authorities delay a decision to grant approval.
To achieve the planned increase in builds across the UK, new homes will need to be delivered in shorter timescales. Opportunities such as offsite construction, modern methods of construction, custom build and the way that build programmes are developed will need further consideration in future.
What is apparent is that if the housing market is to move away from the historic trends of ‘boom and bust’ and achieve sustained future growth, it needs fresh impetus as well as continued stability and support.
Ahead lies a fantastic opportunity to build a better housing market – we just need to reach out and seize it.
