Positive measures in Budget but more needed to reach 300k homes target
Cutting Stamp Duty for First Time Buyers, combined with existing support from the Help to Buy scheme will allow more young people to buy a home and boost the number of new homes being built. Reinforcing demand will support home builders in planning their investment in future housing sites and allow them to build even more homes.
However, to achieve the extremely challenging target of 300,000 homes a year set by the Chancellor further policy interventions will be required over the coming years. A step change in how we bring land forward for development would be required that reduces the bureaucracy and cost of the planning system that currently can take years to navigate; whilst Government must introduce polices that enable more types of companies to build new homes. Housing output is up a massive 74% in the past four years, with most of the increases provided by bigger builders. We need to see SME builders, retirement providers and a greater contribution from the PRS and social sector if we are to hit the 300,000 target.
Moves announced today to assist SMEs alongside changes to the planning system to bring more land forward more quickly are a welcome starting point but need to be implemented effectively and quickly. Measures today include;
- Starting to move forward some of the very positive measures announced in the White Paper in March such as forcing Local Authorities to identify a % of small sites in their housing plans would be very welcome. We need to see the White Paper as a whole implemented as a matter of urgency such that more land, in the right places, comes forward much more quickly.The current system whereby it can take years to process a planning permission to the point where builders can build is a constraint on further increases.
- More money for the Home Building Fund to assist SME builders get on to sites and starting to build. We need to see more of this money coming forward more quickly.
- Land banking review- as has been proved by a number of independent investigation (Barker,Calcutt,OFT) the industry does not ‘land bank’; and any review that identifies non housebuilders who do sit on permissioned land- and brings it forward- would be welcome. A review would also ‘reveal’ the number of permissions ’stuck’ in the planning system – that some industry ‘experts’ include in so called land bank figures.
- Giving HCA, that has proved a successful as a delivery agent, more powers is positive. Creating PPP development companies to deliver five new communities is sensible- but new towns should not be allowed to be used as an excuse by Local Authorities to avoid prioritising housing supply in the short term.
Figures released last week show that there were 217k additions to the housing stock, a 74% increase in supply in the past four years; and with the number of planning permissions granted, a strong indicator of future build levels, at the highest rate on record, increases look set to continue. The figures demonstrate that the industry is responding to Government policies aimed at stimulating supply.
Stewart Baseley, executive chairman of the Home Builders Federation said; “300,000 homes a year is an ambitious target and will require further improvements in the policy framework and business environment to allow the sector to deliver. There is no silver bullet that will deliver a step change in supply but Government needs to continue to develop policies that will build on the big increases in supply of recent years. The measures announced today will assist by stimulating demand and helping broaden the supply base of new homes. But much more needs to be done, in particular with regards to the planning system, if the target is to be met.
“Government needs to continue to help big builders whilst introducing policies that allow SME builders and specialist providers alongside the affordable housing sector to play their part in building the homes the country needs.
“Alongside Help to Buy, abolishing stamp duty for aspiring first time buyers will allow more people to purchase a home, providing certainty of demand allows builders to invest in land and skills with confidence and so directly increases supply.
“The number of SME builders has collapsed in recent decades so more money for SME builders is welcome and needs allocating quickly. The planning system remains a significant constraint on the industry’s ability to deliver and improvements are positive, though further proposals form the White Paper need bringing forward. Re land banking; “As has been proved by numerous independent investigations in the past, house builders do not land bank. House builders have nothing to fear from a review of land banking and if it identifies non house builders who are sitting on land and brings that forward for development it would be a positive move. Any review should also focus on why so many plots that some suggest are in a builders ‘land bank’ are mired in the planning system and identify ways to process them more quickly so they can actually be built.”
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Notes to editors
1. The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk