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Housing Supply:The Debate
  • Written by Oasis Studio
  • June 16th, 2014
  • About General

Housing Supply:The Debate


An overview of the issues facing housing supply and the involvement of the relevant stakeholders in the supply and demand of new homes.

The majority of new homes provided on an annual basis are supplied as private housing, largely constructed by speculative developers. Private housing has formed the predominant form of supply since local authorities ceased to build in any considerable volume, new social housing provides a small but significant level but is dwarfed by the open market completions.

Who is Doing What?

Government: Role is to facilitate the right economic conditions and create suitable legislation to enable the housing requirements to be met

The coalition government has taken a concerted approach to overhaul planning legislation to cut the ’red tape’. This has been most noticeable with the introduction of the National Planning Policy Framework which replaced numerous separate policy statements and guidance documents. Additionally removal of minimum density targets has allowed developers to propose schemes in line with local market demand.

Incentives including Help to Buy, New Buy and the New Homes Bonus have targeted both Local Authorities and purchasers in creating a stimulus for new homes.

Planning Authorities: Role to strategically assess where housing required and assess proposals

Planning authorities have been aiming to provide local planning policy which accords with the NPPF, in order to retain validity of their local plans. This has been made in conjunction with the ongoing strategic assessment of new housing requirements and supply (SHLAA) to demonstrate a deliverable supply over the next 5 years.

Developers: To supply new homes within the constraints of economic conditions & market demand.

Developers have adjusted mix of developments to enable the type of properties they are building to fit with market demand. They have backed Government Help to Buy and New Buy incentives which have facilitated demand in the market. They have greeted the legislation changes of the NPPF to pursue sites for new development which depart from the policies of previous local plans.

Purchasers & Occupiers: The drivers of demand and housing need

For first time buyers there is an understanding towards the requirement for a larger initial deposit, driven by the more restrictive lending available. This has lead to some people living with parents for more extended periods to avoid the private rental market and enable faster deposit saving.

Some buyers have utilised the available incentives to secure mortgages in lower LtV situations. Whislt others have settled for private renting in the short to medium term rather than pursue home ownership.

What have been other suggested solutions?

Creation of New Settlements The touted eco towns and garden cities are suggested as a solution to housing supply, but have caused great debate and objection.

Improved Viability of Brownfield Development Improving its viability through potentially more relaxed planning obligations.

More Housing Association / Local Authority house building Housing association completions to increase and the return to more local authority house building.

Taxing Land Banks Forcing sites to be built out rather than delayed or mothballed.

Better Strategic Planning Suggestions of more comprehensive allocated housing sites could lead to more of a straight forward route for developers to gain approvals and make the system less fraught with confrontation with neighbours and community objections.

Self Build As an alternative means of providing private housing, self build takes the responsibility to supply some new homes away from the speculative developer.

What does the future hold?

If we continue to sustain the shortfall on housing delivery there will be knock-ons in both economic growth and social change in expectations of home ownership. Given the right conditions by Government / local planning legislation, developers will build to meet the market demand.

You would, think, hope and expect that in a politically stable economy we could provide some form of cohesive solution to maintain a level of housing supply to meet requirements.

Our guess is that we will be having this debate for many years to come!

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