Housebuilding

When building rates in England reached a peak at just over 350,000 homes in 1968, the public sector was delivering almost half of all new homes. With only 115,000 new homes built in 2012, housebuilding levels in England are currently half of those needed to meet the formation of new households, which is expected to rise by 221,000 a year. Since the beginning of 2010, there have been 388,000 completions in England. Of those, only 22% have been delivered by housing associations and a tiny 1% built by local authorities.

Savills expect private housebuilding to rise, boosted by the equity loan element of Help to Buy and an improving economy. Despite the increase in activity, it is unlikely that private housebuilders will deliver the necessary volumes to meet the demands of a growing population.

The decline in capacity from Small and Medium Enterprises (SMEs) and regional housebuilders, which played a significant part in the delivery of homes in previous housebuilding upturns, has left a gap.

Could housing associations and local authorities step up to the breach and provide much needed new housing?

Government cut backs are prompting the public sector to develop a new approach to funding and finance.

Homebuilding is a way of converting surplus land into reliable income streams and maximising resources. By creating a self-sustaining portfolio delivering market rent, housing associations can build another business line.

How housing associations compete with private enterprise for land, particularly when it comes to building for rent rather than market sale, has been the subject of much debate. This is likely to intensify as the housing market improves and land values rise.

Planning flexibility around affordable housing provision and how need is met, could improve the viability of a greater number of sites and permit the development of homes for market rent aimed at excluded households.

Negotiations over the release of public sector land should not be confined to present day land values but look at the bigger picture. Increasingly, housing must be regarded in terms of infrastructure, particularly when it comes to regeneration.

An increase in housebuilding will not only provide a greater number of needed homes but also create jobs and support the economy.

Taken from
Spotlight: Bridging the Gap in Housing