Tuesday, 2 September 2014
Will we ever build enough new homes?
GVA’s latest Development Outlook report notes that, helped by the strengthening economy and government initiatives, there has been a surge in development activity over the last twelve months, with new private sector residential construction orders increasing by over 30%. The 138,441 starts on new homes across the UK is the highest since 2007, but remains well below the 265,000 new households that are forming each year and even further below the 300,000 required if the historic backlog is taken into account.
So why are we not a nation of house builders? What is preventing us from adequately housing ourselves?
Let’s get the big one out of the way first. We are a nation of Nimbies. The British Social Attitudes Survey suggests that opposition to new homes fell between 2010 and 2013, but there is still a discrepancy between the recognition that new homes are needed nationally and the support for new house building locally. The loudest voices at planning committees are the people who are already on the housing ladder.
Then there is the question is land. Even if land is allocated for development (and development plan coverage remains poor, often in part due to our Nimby friends), owners are not compelled to release it for development and with no compulsion to do so many can be content to retain it as an investment. This can apply as much to public sector land as to private sector, though often it can be difficult to find out who owners actually are. Unlocking land is also often a major barrier because often capital investment is required early in the development process, but capital receipt is not captured until much later.
What though to do about it? Well for a start we need the housing, development and construction sectors to be more vocal in highlighting the benefits of new homes and consequences of not providing enough. The industry needs to speak on behalf of those who do not own their own home and to try to win the support of local politicians who are often swayed by the vocal minority.
There also needs to be an acceptance that the current private sector model within the current land and planning systems will not deliver enough new homes. GVA’s ‘Development Outlook’ report, for example, notes that house builders, wary of the peaks and troughs of past economic cycles, may show restraint in the face strong house price inflation rather increase output.
The public sector, therefore, needs to take a greater role in enabling and building new homes. At central government level there is support for garden cities, but in the build up to the 2015 general election and wary of our Nimby friends, that support is for proposals that are ‘locally-led’. In the absence of any deliverable proposals to date and with the general election out of the way, perhaps the next government will be bolder and more visionary.
At local government level authorities will need to work across departmental budgets and with neighbouring authorities to pool what resources are available so that they can be invested in large scale schemes.
What is clear though is that if we keep doing what we are doing we will never build enough new homes.
This is a piece that was written for Construction News.