Tackling The Housing Crisis Will Take More Than Money

02/09/2016 11:50

The latest housebuilding figures from the Department for Communities & Local Government (DCLG) confirm the worst fears of many within the property industry. We are failing to address the housing shortage in any meaningful way.

Let's look at the number of housing 'starts', new housing projects where work has begun. In England, work has been started on 72,050 homes in the first half of 2016. That's down from 74,280 in the same period of last year.

The picture is no better on completions. The number of new homes completed in the first half of 2016 in England stands at 67,560, down from 71,810 in the first half of 2015.

The Government has committed to building one million new homes by the end of this parliament in 2020. At the current rate, we won't even come close. Drastic improvements are needed and soon.

One big problem that the Government faces is the attitude of the big housebuilders. A number of the biggest builders have announced that as a result of the Brexit vote they will be taking a much more cautious approach to buying land for developments. In other words, while they are making good profits, the uncertainty created by our vote to leave the European Union means they are wary of doing more than they already are.

So where are all of those additional homes going to come from?

It has been reported in the last week that the Government is preparing a Home Building Fund worth up to £5 billion, aimed at helping small and medium-sized developers to pick up that slack.

Finance is unquestionably a big issue for small and medium-sized builders. But it would be short-sighted in the extreme to ignore the other major factors which are holding back developers just as much as difficulty in accessing financing for their projects, such as opening up land for development.

The Government has made a number of announcements on this front, including pledges from the Department for Communities & Local Government to release enough publicly-owned land to build 160,000 homes by 2020.

But a report from the National Audit Office highlighted just how far behind schedule it is; so far land with the capacity for just 8,580 homes has been sold.

Little wonder then that research in June from Knight Frank found that 57% of housebuilders had not seen an increase in access to public sector land, despite Government promises.

There is also a real problem with skills. There are plenty of would-be developers out there with the enthusiasm to take on housing projects across the country, delivering the homes that we so desperately need. But property development isn't easy, and as things stand many do not have the skillset or knowledge they need to make a success of their projects.

The industry and Government must come together to do more to arm them with the tools they need. That means giving them real guidance on how to accurately evaluate potential development sites, educating them on the intricacies of the planning system minefield and helping them work out exactly how they should structure their project.

Helping these developers will take a more nuanced approach than simply offering them money to fund projects.