Changes Need To Be Made To Development Regulations & To Meet Government Housing Targets

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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“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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