10 July 2009
Why we’re in denial over housing supply
I’ve been reading with great interest the National Housing and Planning Advice Unit’s (NHPAU) report and research into the public's attitudes to housing, and the affordability problem in England. They highlight the imperative of having sufficient homes to meet demand.
The NHPAU states quite rightly that attitudes to new housing development need to change as a matter of urgency. In their research 51 per cent of homeowners would oppose more homes being built in their area, compared with 31 per cent of non-homeowners! So we’re in denial at a time when 6 million young people will not be able to get on the housing ladder until prices fall to more affordable levels and they have realistic access to a mortgage.
As I‘ve said in recent blog posts recessions do not impact on the number of people wanting a home, but they do cause a sharp drop in the number being built. All this serves to exacerbate a growing problem of the mismatch between supply and demand.
The NHPAU’s report states that, “the evidence is clear: we need to take some major steps to close the gap between supply and demand or the consequences for individuals and families will become increasingly severe, with wider economic and social impacts. We need to move the debate on from whether there is a problem… to how we can plan for the homes we clearly need in a way that will benefit existing communities and protect the environment."
What are the consequences of not enough housing being built? More people will be homeless or live in overcrowded conditions, more young people will be forced to continue living with their parents, and the aspirations of millions to live in the type of homes they want, where they want, will be frustrated. This lack of people mobility will impact upon the wider economy.
In some respects the whole issue of housing is being buried underneath the recession, but the housing problem will be here long after the recession has passed. Therefore, current and future Governments need to create robust policies that will improve Britain’s housing supply. This is of course not as simple as it sounds.
What we don’t need however is knee jerk responses that will create mono-tenure estates of affordable and council housing that have no regard for creating sustainable communities and which would, if built, create a legacy of social problems.
As I said in my last blog we have got to address the issue of development finance if we are going to be able to increase housing supply. Bank loans may not be as readily available in the future as they have been in the past. So how the development industry is going to be financed in the future has got to be addressed.
I also can’t help but to think of the planning situation. It is very slow to respond and the process takes an incredible length of time compared with the past. Government has tried to improve it without much success, but the Conservative’s proposals are going to make the situation worse by delaying the system further.
I welcome the Government’s additional funding for housing that was announced recently and particularly the additional £500m of Kickstart support that will enable more developments to move forward. However, the funding is still relatively modest when considered against the size of the problem.
Shared equity schemes, such as the HCA’s HomeBuy Direct and the First Time Buyer’s Initiative, are helpful in enabling more people to be able to buy a home they want. Hundreds of people are now enjoying a new Countryside Properties’ home as a result, but more needs to be done on a grander scale and we need to make these schemes easier to access and understand.
We have recently launched a new video which highlights our unique approach to development. I hope you enjoy it.
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21 May 2009
Property developers must cope with the present and look to the future
There has been a huge amount of media coverage in recent weeks of MP’s expenses alongside criticisms of bankers. These issues must not be allowed to overshadow everything else that we must cope with during this recession, including doing everything possible to stabilise the economy and then bring about a recovery. Indeed, we are planning ahead for the inevitable upturn.
We are engaging with those providers of goods and services and considering how the development industry’s capacity can be stimulated through the training and re-employment of professionals and craftsmen who have been made redundant. The question for all stakeholders is how we assist them and offer training to enhance their employment opportunities. Without a coherent strategy and incentives it will be many years before we return to the necessary levels of delivery of 240,000 new homes per annum.
How is my development company coping with recession? Like many developers we have deferred starting on some sites, slowed down the speed of construction on other projects and continuously reviewed our overheads and expenditure. At the same time we’ve been looking at the best ways of selling the new homes that we’ve been building, whether this is via Part Exchange, Shared Equity or other buyer support. As a result in recent months we have been experiencing encouraging numbers of visitors and reservations on almost all of our new home developments.
Where appropriate we have also sought assistance from the Homes and Communities Agency who have been given £600m of additional Government funding in the Budget to kick start a number of stalled housing schemes, including extra funds for HomeBuy Direct a shared equity scheme that we are currently offering on some of our sites.
The scale of what is needed to stabilise the housing market and then bring about a recovery is considerable. Whilst Government assistance is welcome, and will make some difference, it is not enough to get the development industry moving again. The effective rationing of mortgages and finance for developments are still the critical issues.
Whilst we are coping with present difficulties we must not take our eye off the future. We must prepare for it. This is particularly so for developers and many parts of the public and private sectors where forward planning and investment are critical for future success. Improving our infrastructure is a pre-requisite for many developments to move forward and therefore infrastructure works should get underway now. Developers should not wait until the market improves to progress their planning applications. Certainly we have been moving a number of major developments forward so that we will be ready to go ahead with them when the outlook improves.
Please do let me know if we can help you with planning and development issues that you may have.
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