The latest housebuilding figures from the Department for Communities & Local Government confirm the worst fears of many within the property industry. We are failing to address the housing shortage in any meaningful way.
Let’s look at the number of housing ‘starts’, new housing projects where work has begun. In England, work has been started on 72,050 homes in the first half of 2016. That’s down from 74,280 in the same period of last year.
The picture is no better on completions. The number of new homes completed in the first half of 2016 in England stands at 67,560, down from 71,810 in the first half of 2015.
The Government has committed to building one million new homes by the end of this parliament in 2020. At the current rate, we won’t even come close. Drastic improvements are needed and soon.
One big problem that the Government faces is the attitude of the big housebuilders. A number of the biggest builders have announced that, as a result of the Brexit vote, they will be taking a much more cautious approach to buying land for developments. In other words, while they are making good profits, the uncertainty created by our vote to leave the EU means they are wary of doing more than they already are.
So where are all of those additional homes going to come from?
It has been reported in the past month that the Government is preparing a Home Building Fund worth up to £5bn, aimed at helping small and medium-sized developers to pick up that slack.
Finance is unquestionably a big issue for small and medium-sized builders. But it would be short-sighted in the extreme to ignore the other major factors that are holding back developers just as much as difficulty in accessing financing for their projects, such as opening up land for development.
The Government has made a number of announcements on this front, including pledges from the DCLG to release enough publicly owned land to build 160,000 homes by 2020.
But a report from the National Audit Office highlighted just how far behind schedule it is; so far land with the capacity for just 8,580 homes has been sold.
Little wonder then that research in June from Knight Frank found that 57 per cent of housebuilders had not seen an increase in access to public-sector land, despite Government promises.
There is also a real problem with skills. There are plenty of would-be developers out there with the enthusiasm to take on housing projects across the country, delivering the homes that we so desperately need. But property development isn’t easy, and as things stand many do not have the skillset or knowledge they need to make a success of their projects.
LendInvest has launched the LendInvest Property Development Academy, a non-profit initiative aimed at arming developers with the tools they need. It will cover the full development project: from land valuation and acquisition through to planning permission, supplier contracts, cost management and final sale. Sessions are led by experienced advisers (from solicitors and planners to valuers and surveyors) who know exactly what it takes to get small-scale property developments delivered on time and on budget.
Helping developers to deliver the homes we need in the UK will take a more nuanced approach than simply offering them money to fund projects.