We cannot allow delivering more homes to result in substandard properties – LendInvest

So it’s timely that the government has now delivered an updated version of the National Planning Policy Framework, last published six years ago, which sets out in clear detail the planning policies for England and how they need to be applied in order to move forward with developments.

There’s plenty of encouragement to take from this new document.

For example, it puts a suitable emphasis on ensuring that the new homes delivered across the nation are of a high quality.

As we have seen in recent years, in the push to increase housing output some of the largest builders have elected to cut corners.

This has led to buyers of new builds finding that their dream home is more like a house of horrors, with compensation having to be handed out as a result.

This simply isn’t good enough. We cannot allow the drive to deliver a greater number of homes result in substandard properties.

Similarly, the framework focuses on building the right number of homes in the right places.

This may sound obvious, but having the clarity around producing new properties in the areas where they are not only most needed, but where the infrastructure is in place to handle them, is welcome.

Guidance and responsibility

Another important development in the framework is the way that it gives councils more responsibility – and alongside it, accountability – for the production of new homes.

From this November, councils will face a housing delivery test which should help push up the numbers of new homes being delivered in their area, rather than simply the numbers planned for. This is a vital change in emphasis.

Alongside this, the framework includes clearer guidance for developers, putting them in a more informed position on what is expected of them even before they get to the state of submitting a planning application.

This should be particularly beneficial to SME developers, who for so long have found the planning process interminable, causing them to hold off on potentially profitable projects while they navigate the needless complications and bureaucracy.

We need these developers to produce more homes – we cannot continue to look solely to the housebuilding giants to do more.

But if we are to help the SME developers, then removing some of the obstacles they face is essential.

The finance conundrum

While the framework is a step in the right direction, it is notable that the word “finance” does not appear in the document once.

There remains a real problem with putting in place the financing needed for small and medium-sized developers to build those homes.

Last year the Federation of Master Builders noted that a decade on from the financial crisis, there remain significant issues for small builders when it comes to accessing the finance they need.

While there has been a significant growth in the number of non-bank lenders active in the market, options are still more limited than they should be.

Use those with inside knowledge

Government has targeted building 300,000 new homes a year by the mid-2020s.

The only way that can possibly happen is by boosting small builders so that they can play a more active part in the housing development process – addressing these funding issues lies at the heart of the struggles small developers face.

While the government has recognised the funding issues facing traditional lenders, and put in place a multi-billion pound Home Building Fund, we still have little idea about just how that money is being deployed nor how many new homes it has resulted in.

If the government really wants to use that money most effectively, then it should be making far greater use of lenders who truly understand this sector as intermediaries, rather than attempting to take on the role of lender itself.