Andy Frankish, new homes director at Mortgage Advice Bureau, provides an in-depth analysis of the new-build sector
Is it me or does the general election seem like a distant memory? Yet how different things could have been had we had a hung parliament.
The continuity in government has been great for the new-build industry and having a majority has meant more pace being injected into some of the manifesto pledges.
Before I go on, I must stress that I have no political persuasion. Given my upbringing in a coal-mining town in the 1980s, Mrs Thatcher’s Conservatives were not the toast of the house. However, I find it difficult to criticise what the present Government is doing on new housing. Yes, this is a massive and very complex problem to solve but there has been some bold action in the early weeks and it is action that we need.
The new Government moved quickly to reassure borrowers and builders that it proposed continuing with the Help to Buy equity share for new-builds through to 2020, although no such proposal has been put forward for the mortgage guarantee scheme. Not yet, anyway.
Help to Buy Isas are set to launch in December and the Starter Homes Scheme is also expected to be made a lot clearer in the fourth quarter of the year.
In addition to these very customer-focused initiatives, the Government has stated it is putting housebuilding “at the heart of its long-term economic plan”, proposing further reforms to speed up planning applications, particularly on brownfield sites, and intervention in local authorities’ development plans.
A major initiative of vital importance in the world of new-build has already got off the ground. The Housing Growth Partnership, launched by housing minister Brandon Lewis in partnership with Lloyds Banking Group, working through the Home and Communities Agency, is a £100m fund to deploy exclusively to smaller regional housebuilders, which typically develop up to 75 residential units per year.
The Government has a target of 2,000 new homes from this fund, designed to support SME builders in raising the much-needed finance for developments – something that has proved difficult for this category of developer since the credit crunch.
Accessing finance has been a major obstacle to Britain’s smaller housebuilders, so this is a welcome and positive move in the overall plan of getting Britain building.
Another welcome development is the Government’s decision to drop the Allowable Solutions carbon offsetting scheme from its new productivity plan, ‘Fixing the foundations: Creating a more prosperous nation’. This document was published straight after the summer Budget last month.
The UK is already building some of the most energy-efficient homes in the world under the current standards. Developers have fully supported the industry and considerable progress is still being made to deliver ever-higher standards in efficiency.
The Allowable Solutions approach that had previously been announced would have imposed significant additional costs with no obvious enhancement in the energy efficiency, so dropping this makes a lot of sense.
In general, all the measures we have seen so far and in a very short time are welcomed and much supported.
Let us hope this change curve continues as there is still plenty of work to be done.