Good afternoon and welcome to HBF’s Annual Lunch.
Firstly, thank you to H + H for sponsoring today’s event
As ever, its great to see so many familiar faces – especially as this year most aren’t looking quite so worried! And well done for managing to get here on a difficult day for moving around the capital.
Unfortunately time is pressing so I haven’t got time to go into many of the seemingly endless issues we are currently dealing with and very shortly I will hand over to housing minister Kris Hopkins who I am very glad joins us today.
However there is more detail on all our work in our Annual Review that you should find on your chairs. But before the Minister speaks let me just say this.
After six or seven years of very difficult conditions, when many wondered when, or whether, we would actually emerge from the worst downturn in living memory, you could be forgiven, based on the daily headlines of a property bubble, for thinking that all our problems are behind us.
Without doubt we meet today in a significantly more positive operating climate than for quite some years, although we should not forget that we are still a long way short of producing the number of homes the country requires if we are ever to solve our housing crisis.
The good news is however that whichever measures you look all are showing big increases in site activity. CLGs new homes starts statistics, NHBC registrations, our own planning permissions granted figures – all showing increases year on year of around 25%.
Why? Primarily because of the positive impact of the Help to Buy Equity Loan scheme that has enabled so many people to realise their aspiration to purchase a home by addressing the challenge of how to meet the deposit gap - the difference between the amount they can borrow and the price of the home they would like to buy.
We have been stressing to Government for years the impact that the scale of the deposit gap and the lack of high loan to value mortgage products had been having on demand and thus supply.
I’ve lost count of how many times I’ve said to successive housing minsters, secretaries of state and others, ‘if people can buy, we can build’- as I’m sure John Healey can testify from when he was in office as Labour’s last Housing Minister.
In fairness both the current and previous governments understood the issue and various schemes, starting with Homebuy Direct through Firstbuy and NewBuy, addressed the problem. But none of them have achieved the scale that Help to Buy has achieved in its first twelve months.
The approximately 30,000 sales Help to Buy has delivered since it was launched on April 1 last year has had the dramatic desired impact on build rates demonstrated by the stats I just mentioned . Over 1200 companies are now signed up, the vast majority of which are SME builders whilst the sales stats show it is delivering in all regions, giving a boost to house builders and economies across the country. 75% of sales outside the south east and mostly to first time buyers as the median sales price of homes sold using the scheme is around £185000.
The extension of the scheme announced last month in the Budget hopefully gives us certainty until the end of the decade. This allows us to plan our businesses, recruit the people we need, ensure the supply chains are in place and build more homes for the years to come – allowing us to play our part in building the homes the country needs and in turn, giving the country an economic boost the Government, indeed all of us, are so eager to see.
Of course there is a long way to go. Help to Buy will not solve the country's acute and worsening housing crisis on its own and ultimately the only way to address that is to build more houses of all tenures everywhere
We are still building fewer than half the homes the country needs; and according to our estimates in the ten years since Kate Barker wrote her seminal report into housing for the then Labour Government, we have fallen a further one million homes behind what is needed in England alone. And one million is a conservative – small ‘C’ – estimate.
Whilst Help to Buy provides us with greater certainty that those that can afford to buy will have a better chance to do so, there are still other barriers which hold back output.
The planning system is of course the most obvious and largest barrier. The NPPF, still in its infancy, has, on balance, had a positive if somewhat turbulent introductory two years. It has resulted in more permissions coming through, at least at the headline level, but it still takes far too long for them to grind their way through the planning process, which seems to be taking longer as every year goes by.
Recently we conducted a survey of a sample of our members – 23 of them who together control some 220,000 plots. Our survey revealed that more than a quarter of those plots are stuck somewhere in the system having been granted an outline permission but awaiting reserved matters to be approved or the pre commencement conditions to be discharged which would enable those sites to be started.
Extrapolated out across the whole industry that equates to over 150,000 plots. How we address that issue and remove the apparent blockages in the system is where the debate needs to be focused, as opposed to wasting time on lazy accusations of land banking – something the survey proved conclusively was not the case with just 4% of all the plots having an implementable permission and not being built.
We are of course working with Kris, and his colleague Nick Boles on this and through our enhanced planning team are representing the industry at every single Local Authority planning inquiry to ensure house builder’s interests are considered as Local Authorities set their housing numbers and allocate land for development.
We have good relations with all political parties and are also working closely with Labour as they develop the policies with which they will fight next year’s election and we welcomed their commitment to build 200000 homes a year if elected.
As the election draws closer it is becoming increasingly apparent that housing will be an important issue. On the plus side all parties now agree more homes need to be built. The debate is about how to achieve that.
Whatever the outcome of next year’s election I hope whoever is in power will build on what has been achieved on both supply and demand side issues rather than attempt further wholesale reform.
HBF needs to ensure that we continue to have a seat at the table and take every opportunity to get our messages across about the need for speeding up the planning system; about realistic regulatory requirements and about the steps needed to assist smaller builders play their part in increasing supply to somewhere closer to the level required.
If we can do this, and the Government, of whatever political colour – or colours – it may be in just over years time, continues to support policies that allow us to build more homes, the whole country will be able to reap the social and economic benefits.
Its now my pleasure to welcome the housing minister Kris Hopkins. One of the last platforms I shared with Kris was when he joined us in March at an event in Parliament to present plaques to the 18 builders who achieved the HBF five star rating. As you will see for the leaflet on your chair, we again reported a fantastic set of Customer Satisfaction survey results this year, with 93% of respondents saying they would buy new again and 90% saying they would recommend their builder to a friend. The results are a credit to our industry, a point Kris made back in March.
He was appointed housing minister last Autumn and has shown a real enthusiasm for his brief, getting up to speed incredibly quickly with the issues and has been a regular visitor to house building sites up and down the country to see for himself what is getting built.
This morning he visited a Help to Buy buyer on a site in Greenwich and his commitment to working with us to overcome the barriers we face has been very welcome.
Ladies and Gentlemen please give a warm reception to Kris Hopkins.