Seven years ago, a target was set by the government to add a further 1 million units to the country’s net housing stock by 2020. Later in 2017, a white paper entitled “Fixing our broken housing market” outlined a series of initiatives, aimed at boosting housing supply and contributing to the government’s lofty target.
The paper also made clear exactly how many new homes would need to be built each year to make this happen.
“Since the 1970s, there have been on average 160,000 new homes each year in England,” it said.
“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.”
Meanwhile, Theresa May affirmed her commitment to the successful completion of the project, stating that she would ensure the government “meets 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.”
Sentiments subsequently echoed by Boris Johnson in 2019, who said he would oversee the continuation of “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.
NHBC Weighs In
All promising assurances on paper, but housebuilders in the UK are not coming close to hitting the government’s target of building 300,000 new homes annually. Data published by the National House-Building Council (NHBC) indicates that annual housebuilding has reached its highest level in over a decade, but still lags behind the government’s ambitious targets.
“Relying on big developers to build affordable homes means the Government is falling well short of their ambitious housebuilding targets,” said Chief executive, Polly Neate of housing charity Shelter,
“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 or for developers to rely on funding through development finance and loans.”
Based on the figures from the past few years, it is now estimated that it will take the government a further eight years to reach the target originally set for a 2020 deadline.
Understandably, Brexit and COVID-19 have had a marked impact on the sector’s ability to function at full capacity.
“The number of dwellings where building work had started on site was 15,930 in April to June 2020,” said the Ministry of Housing, Communities & Local Government research.
“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 economic uncertainty set to continue for some time, a further slowdown for the construction sector cannot be ruled out.
“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, getting the finance is a big problem and is where products such as bridging loans can help,” added Polly Neate.
“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 Consent Problems
The ongoing housing crisis prompted a study by the Home Builders Federation (HBF) and the Land Promoters and Developers Federation (LPDF), with the aim of determining the main causes of holdup. The research conducted that one of the key contributors to the problem is the growing challenge being faced by developers in obtaining planning consents for building plots.
As it stands, delivery of new homes will need to be increased by around 59,200 units per year, in order for the government to achieve its targets. The report also highlighted the criticality of a continuing pipeline “to deliver sufficient homes to satisfy peoples’ needs and demands.”
“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 paramount to scaling up overall output.”
Commenting on the report, LPDF’s chairman, Paul Brocklehurst blamed much of the issue on local staffing and resources shortages.
“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,” he said.
“The imbalance is explained by the length of the development pipeline caused in part by shortages of local government staffing and resources.”
His sentiments were echoed by HBF’s planning director, Andrew Whitaker, who suggested that the only way out of the crisis would be to focus heavily on improving planning processes.
“Increasing the pace of build-out will only be achievable with a faster top-up of development pipelines with more sites,” he said.
“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.”
Spiralling Social Housing Crisis
StripeHomes managing director, James Forrester, launched a scathing attack on the government’s approach to hitting its own housebuilding targets.
“The government knows full well how bad the housing situation in the UK is, and they also know that delivering 300,000 new homes every year is a monumental task, not least at a time when global and local economies are in such flux following the pandemic,” he said.
“But if we’re waiting until 2028 to reach this much-needed target, we’re waiting far too long, especially when England alone currently has over 93,000 households in temporary accommodation and 1.1 million households currently on the waiting list for a social home,”
“Finally, the availability of new homes must also be matched by affordability. Yes, prices will fall slightly if supply is increased, but it’s more about ensuring that homes are built in the areas where they’re most needed and being made easily accessible to those people who need them.”
