Housing – SMEs and Public Sector

Well I started watching the Leaders Debate but I lost interest fairly quickly so had time to right my latest blog. It’s been a strange week, I’ve managed to meet a couple of local smaller house-builders and it fascinates me the innovation and creativity that they demonstrate showing that you can take a small plot of land and create something special. I’m not against the larger developers but I’m just a sucker for something a bit different.

 

Housing is always going to be topical and it’s clear to see why. Since 1952 house prices have risen by 500% and you can see that in real life having just seen a relatives’ house sold for 58 times what it was bought for, now yes that doesn’t factor in inflation but it gives a flavour. Land is scarce and this scarcity will always continue to drive the price higher.

 

As well as the land scarcity, remember in 1979 the public sector stopped building large scale housing developments meaning it was left in the private sector. They aren’t charities they need to make money. Is there an argument to push the public sector more to take back the lead on house building, not sure where funding would come from but could be an idea?

 

Since the public sector closed shop for house building the industry has consolidated and it has seen the number of SME house builders reach its lowest. It is therefore reassuring to see the return of the SME house builder fuelled by wealthy individuals and to an extent the banks.

 

The way I see it is that England still has sufficient undeveloped land (something like only 15% is developed). Whether you invest in developing brownfield land – which is successfully happening across Yorkshire or seek to convert run down areas in inner cities into thriving communities – there is space to do this without even touching our precious green belt land. The Lyons Housing Review focuses on reaching 200,000 houses a year with the growth coming from public sector and PRS. The figures highlight that by 2013 housing delivery had reached a low of 109,400 and growth can come from a number of areas – volume developers opening up their land bank, supportive for new home owners and actually investing in local infrastructure, SME house builders returning to capitalise on sites the volume developers won’t touch and big growth from PRS and public sector.

 

Housing is topical and it always will be because underlying it is big money. But to me there is clear ways you can deliver the targets set out. Continued support to SME house builders benefits local communities and adds something to our landscape, accepting the larger house builders as they contribute largely to the economy and provide housing that help people onto the ladder and invest in housing as its value is only going up! The public sector should return to house building at the scales in the past, providing more affordable homes and controlling much more of the process.

 

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend

Lee

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