Implementation will dictate success but mortgage lending remains the key
Home builders today broadly welcomed the range of initiatives announced to unblock housing delivery. The industry has long explained to Government the constraints on supply and the initiatives announced today suggest the need to tackle these constraints is recognised.
Mortgage availability; this is the biggest current constraint on supply. If people can’t buy builders can’t build. The announcement on more funding for shared equity scheme Firstbuy is therefore welcome. HBF has long pushed for more funding for a scheme that has already demonstrated its value and is understood by home buyers and the industry alike. Following on from the introduction of Newbuy, the scheme that allows new build buyers to get a 95% mortgage, it is good news. However, much more is needed to get banks lending to people who can afford to buy. Mortgage lending is absolutely key to any recovery.
Planning; The new planning system was introduced in March after a two year policy hiatus and so further revolution was not wanted. Today’s announcement tweaks the system to hopefully allow it to deliver more. The announcement that poorly performing Local Authorities will have decisions on housing taken away from them is particularly welcome. LAs are key to the new localism based system and it is essential they abide by their responsibilities. Releasing more public land for development is also positive – but we need to see this land coming through the system quickly.
Regulation; The combined costs of regulatory requirements is making many sites un viable. Action to ensure Local Authorities are realistic in their expectations of what sites can support is therefore welcome - and affordable housing levels and section 106 contributions are obviously significant parts of the regulatory costs. Costs though need to be looked at in total to ensure viability increases
Speaking today, Stewart Baseley, Executive Chairman at HBF said.
“Government now clearly understands the constraints on delivery and has outlined action to address them.
“More money to help buyers is extremely welcome and together FirstBuy and Newbuy will allow thousands to get onto the property ladder.
“Mortgage availability remains the biggest constraint on development and more needs to be done. Until it improves significantly a full recovery is not sustainable, but we must tackle other constraints so that when lending does increase more desperately needed homes can be built.
“With that in mind, action to ensure the planning system is fit for purpose is necessary. Under the new system Local Authorities have more power, but with that comes responsibility and Government must ensure they are meeting the needs of their communities.
“Unrealistic expectations on what house building sites can support is meaning many sites are not viable and house-building cannot take place. While it is positive that Government has recognised this, real progress must be made as quickly as possible to ensure that viability – which is central to construction – is improved.
“Overall, these measures are welcome but the key remains successful implementation and we need to see decisive Government to get them working effectively and quickly”
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Notes to Editors:
The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. HBF’s members 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