In 2015 the government set out a target to secure 1 million net additions to the housing stock by the end of government which was expected to be in 2020. In the 2017 “Fixing our broken housing market” whitepaper, a number of initiatives were laid out to secure a change in housing supply. It stated “Since the 1970s, there have been on average 160,000 new homes each year in England. The consensus is that we need from 225,000 to 275,000 or more homes per year to keep up with population growth and start to tackle years of under-supply. This isn’t because there’s no space, or because the country is “full”. Only around 11 percent of land in England has been built on.”
At this time Theresa May had a manifesto that pledged to “meet the 2015 commitment to deliver 1 million homes by the end of 2020 and to deliver half a million more by the end of 2022.” Furthermore, in 2019 Boris Johnson also pledged to “continue our progress towards our target of 300,000 homes a year by the mid-2020s. This will see us build at least a million more homes, of all tenures, over the next Parliament – in the areas that really need them.”.
However, UK housebuilders are falling behind the Government’s targets of 300,000 new homes a year. This is despite completing the highest number of homes since 2007 and 161,022 being registered in 2019, according to the National House-Building Council (NHBC). Chief executive, Polly Neate of housing charity Shelter, stated “Relying on big developers to build affordable homes means the Government is falling well short of their ambitious housebuilding targets. The last time anywhere near 300,000 homes a year were built, councils contributed more than 40 percent of them. So, the only way the Government can get back to the building at this scale again is by building social homes.”
Covid 19 and Brexit’s Impact on Housing Developments
Following previous financial years and from the baseline of 220,600 homes built in 2019-20, it is predicted that the government will take eight years to meet its target. With this target obviously proving to be a challenge; Covid 19 and Brexit have then impacted further and added another dimension to the ambition. According to Ministry of Housing, Communities & Local Government research “The number of dwellings where building work had started on site was 15,930 in April to June 2020. This was a 52 percent decrease when compared to last quarter and this steep fall in activity reflected UK government COVID-19 lockdown measures.”
With the uncertainty and fluctuation of both covid and Brexit, the incentive on developers to build in the short term has declined. Polly Neate continues “The government wasn’t on track to meet its own targets even before the pandemic hit. Now with a potential slump in construction [and a growing skills shortage] as a result of Covid, the chances of getting the homes we need built are looking even slimmer. With over a million households on the social housing waiting list, and many more facing economic turmoil and homelessness, we desperately need to get building. We can’t go back to business as usual with missed targets and pitiful numbers of social homes.”
Planning Changes
Home Builders Federation (HBF) and the Land Promoters and Developers Federation (LPDF), commissioned research exploring the housing crisis. Conducted by Lichfields it found one of the key causes of the housing shortage, is the declining pipeline of planning consents for building plots. It was concluded the country will need to increase delivery by 59,200 homes per annum. Equating to 474 to 1,385 additional implementable planning permissions on medium to large sites. Based on the current base of 243,770 net additional homes that were delivered in 2019/20.
Additionally, they reported the importance of a continuing pipeline “to deliver sufficient homes to satisfy peoples’ needs and demands”. The stated “with generally short pipelines held by housebuilders equivalent to 3.3 years’ output and each ‘outlet’ delivering on average 45 homes [per] year. To bridge the gap to 300,000 net additional homes will require additional sites being granted planning permission. The scale-up needed is equivalent to each District in England granting permission for an extra 4 to 5 medium-sized sites per year. Or alternatively 4 to 5 large sites over a longer period. Therefore, ensuring a variety of different sites is key to scaling up overall output.”
Paul Brocklehurst, LPDF’s chairman, commented said: “Contrary to the message often conveyed by local authority representatives, there is not a major surplus of planning permissions compared to the actual number of homes being built. The imbalance is explained by the length of the development pipeline caused in part by shortages of local government staffing and resources.”
Andrew Whitaker, HBF’s planning director stated “Increasing the pace of build-out will only be achievable with a faster top-up of development pipelines with more sites. Otherwise, the housing supply will simply dry up. If we are to get back to pre-pandemic housing supply levels, which were still well short of the government’s target of 300,000, more land needs to be allocated and major improvements to the planning process will be needed.”
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