Over the past few weeks
I have had the privilege of reading the submissions for the Variety Yorkshire
Residential Awards and the one striking point is that whether you are a
national house-builder, local house-builder, a PLC or a local SME that everyone
is being increasingly innovate in how they deliver housing. Since 2014 there
has been shift in the attitude to towards solving the UK’s housing supply
problem and actually become a key political talking point during the 2015
election (though that feels a lifetime ago!). The overall crisis of
affordability and ultimately supply continues to rumble but discussion around
solution is becoming increasingly common.
So
what do you tackle first? Well most people you talk to say the price, the
market continues to rise ahead of wage inflation and those in London and to an
extent the regions simply cannot get on the property ladder – not because of
the banks but because the deposit far outstrips most twentysomethings savings.
Affordability is linked to supply, while supply is low prices will rise. So how
do you get close to building 250,000 homes a year?
- Help to Buy: Everyone has heard of this and to be honest it is performing well in driving housing sales. It was also good news that it has been extended. It is estimated nearly 40,000 homes have been sold under the scheme and supports first time buyers onto the property ladder. There is an argument though that although it has kicked started and invigorated the market it’s not solely going to solve the issue.
- Small developers fund (“SMF”): I’ve said before that national house-builders don’t need too much help as they already do things on such a grand scale that they must be doing something right. Small and medium house-builders however still struggle to secure financing. The SMF will provide loans that is hoped will unlock 15,000 homes but the life of the fund is too short to really kick start much and this needs rethinking as financing is the greatest challenge to a SME yet they have potential to unlock land that large house-builders deem unviable. In all fairness simply an extension of the funds life and greater promotion, even targeting companies would be the best idea.
- Garden Cities: We’ve done then once so let’s do it again. Sounds such a dream place to live, a garden city but in reality it won’t solve the problem particularly when the Housing Minister stated the Government is unwilling to show its support. Now I think if you throw support behind and select appropriate sites, i.e. those for commuting to London, Birmingham etc then you can create something special and the scale of them attracts the national house-builders.
- Increase density: You could follow suit with London where residential now is followed by the word “tower” – land is limited so simply build more. It works in London where there is a need for smaller apartments close to the busy business districts or for those who commute from the countryside but would it work in Sheffield, Leeds or Newcastle to the same extent. Doubt it!
There are many options
that could help solve the current predicament but many suggested ideas are
limited in the time available to them but only provide a short term solution
with few offering large scale help. Created a drive behind public funded
housing, like the good old days, seems an expensive but longer term answer. It
needs funding to get it started but once the churn starts then it could have
legs. All the above though miss out one person, the community. If a community
don’t want a development they will do their best to stop it. Working with the
community more closely from inception can mitigate this and allow developers
and communities to better the community.
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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