Currently, the equation is very simple: there are too few new homes to meet demand in all areas of the country. The lack of supply, arguably, pushes up the price of the existing housing stock to high levels which fuels fears of unaffordability.
In a bid to ease this issue, The Local Government Association has issued a press release which sets out their thinking about building 500,000 new homes.
We should welcome any effort to increase the housing supply, but to take matters beyond consultative documents and discussion around new garden cities will require practical, down-to-earth action.
We, at Geoffrey Leaver, work with small to medium-sized developers and housing associations (SMDHAs). We acknowledge that the larger developers (those listed, for instance, as public companies) will play a leading role in meeting the increased demand. However, the market is large, varied and evolving.
Having spoken to our clients, we would suggest the following to the policy-makers:
1. There needs to be a focus on SMDHAs. Policy-makers should use the immense knowledge of the market available to them from within SMDHAs by involving them in planning policy and site identification and utilisation.
2. Statistics show that SMDHAs are a driver of increased development and build homes sought after by a large part of the market; the SMDHA base is recovering after the events of 2007 but more confidence is required.
3. The profit has to come back into development for SMDHAs; this should include tax breaks for developing brownfield and niche sites, with reduced and simplified VAT, NI and corporate tax benefits for a smaller company which runs its own build-out arm.
4. The expertise available to SMDHAs allows them to engage with local communities efficiently to achieve valuable development, integrated with the local community.
5. The huge land banks need to be broken up into bite-size pieces, and government-backed finance made available for the social housing providers to purchase these sites and get-on and build.
6. Simplifying the planning and building regulation regime, asking developers to build houses for which the regulatory regime removes any margin in the build-out cost, is nonsensical. As an example, home buyers now are environmentally-sensitive, as the market requires housing that respects the environment therefore developers will build that housing. To impose a regulatory regime and additional costs reduces the housing being built.
7. Have the infrastructure in place; too many times local schemes fail in practice because the infrastructure is inadequate or all too often fails.
We call on policy-makers to acknowledge the role of the SMDHAs in the required expansion, as the SMDHAs are able to develop smaller sites, brownfield sites and operate “in tune” with their customers in a way that can enhance the role of the larger developers. At Geoffrey Leaver, our property specialists look forward to working with SMDHAs in the next few years to build up the housing required for the future needs of the local population.
If you would like to talk to either Darren Millis or Richard Willis in our property development team about how we can help you with any development or property related matters affecting your business please call us 01908 692769 using reference code CP001.