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Warnings raised about London housebuilding as TFL eyes massive development role

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  • 21/06/2017
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Warnings raised about London housebuilding as TFL eyes massive development role
Housebuilder Berkeley Homes has warned significant issues continue holding back housing delivery in London, however a construction programme involving Transport for London land could yield 10,000 new home starts by 2020.

Despite its warning Berkeley noted that reservation cancellation rates had returned to “normal levels” following the tumult of the Brexit vote aftermath and revealed its own profits for the year to April jumped by 53% to reach £812.4m..

However it warned that conditions were failing to support the “much needed growth in housing delivery” in the capital, with the number of new starts falling by 30% across London according to recent figures from the National House Building Council.

It blamed the planning environment, with increased demands for affordable housing and Section 106 obligations, for acting as a brake on attempts to boost supply.

 

Brexit effect

In its statement, Berkeley added: “Build costs have increased at a similar rate to last year, around 6%, with currency movements impacting materials pricing. There is a recognised skills gap in the UK construction workforce and it is hard to predict how build costs will be affected by Brexit as approximately half of London’s site labour comes from the EU. This needs to be addressed by a combination of continued access to EU labour, skills training and innovation in construction if the industry is to achieve its medium term production aspirations.”

Berkeley’s warnings come at the same time as a new report from the London Assembly’s Housing Committee, which looks at how Transport for London (TfL) can use its land to build more homes, and at a greater rate.

Recommendations in the report include for TfL to add a property professional to its board to ensure “effective oversight of its property development activities”, to prioritise identifying small sites in order to boost the lot of small developers, and adopting “radical solutions” in order to speed up development on the first sites found.

Andrew Boff AM, former Chair of the London Assembly Housing Committee said: “TfL has set itself the target of starts on sites by 2020 to deliver 10,000 homes.  Our evidence suggests this is something of a sprint, and we don’t think it’s going to make it unless it takes some more radical steps.

“Either way, we need to be clear about the trade-offs TfL’s making, to be sure its land is delivering the best deal for Londoners.”

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