Construction industry reacts to Government's vow to fix "broken" housing market

The Government has presented its much-anticipated Housing White Paper, vowing to fix Britain’s “broken” housing market and boost the delivery of new homes, and there has been a mixed reaction from housebuilders and construction industry experts.

Communities secretary Sajid Javid said that with at least 250,000 new homes needed every year to keep pace with demand, the White Paper sets out "bold" measures to reduce the obstacles to building, supposedly improve affordability and better protect renters and buyers.

Under the proposals, every local area will be required to produce a “realistic” plan for meeting housing demand and review it every five years. At present, Javid said, 40% of local authorities do not have an up-to-date strategy to meet projected household growth. Fixing this will result in more land being released for development in parts of the country where people want to live while still protecting the greenbelt, he added.

Councils and developers will also be expected to avoid low density housing and build higher in areas with a shortage of land or in locations well served by public transport.

The white paper will make it easier for councils to issue completion notices, shortening the timeframe that developers must start on site after planning permission is granted from three years to two.

Developers will have to detail the pace of housing delivery to help councils plan for local need. This will help address the "serious and growing gap" between the number of planning permissions granted and the number of completed homes, Javid said.

Other measures include a £3 billion fund to help smaller builders enter the market. Around 60 per cent of new homes are currently delivered by just 10 companies.

A Lifetime ISA will be launched in April to help young people save for a deposit and discounted Starter Homes will be targeted at first-time buyers with household incomes of less than £80,000 (£90,000 in London).

The Federation of Master Builders (FMB) has responded warmly to the white paper’s proposals believing it contains a number of key measures which should boost the opportunities available to SME house builders.

“I’m pleased that the white paper recognises the potential for SMEs to deliver far more homes than they do currently," says Brian Berry, chief executive of the FMB.

"In addition, it accurately identifies the key barriers to them doing so as land, planning and finance.

"Of these, finding small sites and then getting planning permission is the greatest single barrier. In too many places, the approach to planning for new homes has come to be focused almost entirely on large sites and large scale delivery. This approach has slowed down the delivery of homes, and has helped shape an uncompetitive house building industry and an unresponsive supply of housing – this has to end.

Berry continued: “There’s a proposal in the white paper to take forward a presumption in favour of small scale development of sorts and this is a huge step forward. So too is the proposal to encourage permissions on so-called windfall sites, that is sites not allocated in local plans.

"Smaller windfall sites must be seen as critical elements in the supply of land and new housing, not as awkward add-ons. Furthermore, plans to boost resources for planning departments could be used to provide an adrenalin shot to a planning system which has been running on near-empty for too long now.

Berry says the white paper must be seen as a launch pad for a real step change in delivery.

"The proposed 20 per cent hike in planning fees, which will only apply where local authorities agree to invest the extra resources in planning, will get a cautious welcome from most small developers, he says.

"If this can be shown to deliver observable improvements in planning services, then it would make a good case for further increases along the lines the white paper suggests.

However, for Shraga Stern, director of London construction company Decorean, actions speak louder than words.

“As a house builder, we naturally welcome the news that the government has set itself a target of building one million homes by 2020.

"However, we have seen promises and plans laid out before that have never come to fruition and we need to make sure this doesn’t happen again.

"For there to be a real change, the government must enforce changes to the planning system and regulations, which act as a stumbling block for many smaller developers. The white paper is a welcome sight and a positive step forward to providing more homes for our ever-growing population.”

While Ian Anderson, partner, planning and development consultancy, Cushman & Wakefield says from the planning perspective "the white paper does little to add anything new to realistically speeding up the supply of housing."

"There should be a welcome for the recognition of the important contribution the rental sector makes to housing and the Government’s continued support for brownfield development," he says "but the paper offers nothing radical, and in some cases, seeks to impose or curtail present planning flexibility which may actually result in delays to the submission of planning applications and , in turn, a longer lead in time to development.”

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