Million dollar question – how do you build more houses?

So in the week after Scotland said “No” Labour descended on Manchester. I suppose planning a party conference in Edinburgh would have been risky. Now I’m not usually one to pay much attention to a conference but talk of New Homes Corporations (“NHCs”) did get me thinking.

So just to recap that the current problem is that not enough houses are being built so the solution of Labour is to build more, in fact 200,000 per annum by 2020 but with Savills forecasting that 167,000 new homes will be built per annum by 2018 it doesn’t feel like much of an increase.

I do admit though NHCs sound intriguing, though typically details seemed a bit sketchy. NHCs will work with both private and public sector bodies to build more houses, even letting little old SMEs help. About time the little man was involved. The powers the NHCs are expected to be given would ultimately aim to speed up the process so it could work but there are a lot of variables – the big one being Labour getting in power.

So general election aside, what can be done right now? The questions is how can you increase house building in the UK? A quick whip round the pub last night with friends listed stamp duty, more power and incentives as being key but let’s remember the current housing shortage will only continue to push prices up. Are these three ideas simply not far enough.

The Estates Gazette did a much more formal study than my pub attempt and came up with eight options. Two that made me think were (i) making more land available and (ii) improving funding for SME builders. So land, it’s precious but let’s not go mad. I live in a small village and a large new housing estate would significantly change the dynamic of the village unless the local authority had the money to build a new school, improve infrastructure or tempt retailers in. So that won’t work as a larger house builder is unlikely to see pound signs in building say 10 houses; however a SME builder could do it but they can’t get the financing so we’re onto (ii).

Recent discussions with a number of banks, and as I’ve previously mentioned, highlights that they won’t fund SMEs to the same extent as established players. It’s just too risky as they offer less security. Crazy idea, why doesn’t the government help – maybe the NHCs will, time will tell.

So over the next few months leading up to May 2015 we will hear more and more about how each party will resolve this growing issue but please do share your views.

Free feel to contact me 0113 288 2276 or drop me an email if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend,

Lee

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