‘Fixing our broken housing market’

The government has launched last month its latest housing white paper;

'Fixing our Broken Housing Market'

The government believes that the lack of homes being built across the country has resulted in the sharp rise in house prices compared to average income.

Since the 1970’s, there has been an average of 160,000 homes built per year, with research suggesting the actual amount needed is in the region of 225,000 to 275,000 per year. Last year 190,000 new homes were completed.

The research states that between 1997 and 2010 the ratio of average house price to average income doubled, from 3.5 to 7.  The 5 years to 2015 has seen it creep up to just over 7.5 as illustrated on the graph below, taken from the governments accompanying report. (Source: DCLG live table 578)

The government sees the issue as primarily an undersupply of homes, and has targeted a number of areas to increase housing supply.

Local Authorities

The Government believes that Local Authorities are not being accurate in assessing housing need. A new standard methodology for assessing housing need seems their favoured solution.

In light of a drive to encourage housing supply by increasing efficiency, central government is considering allowing higher planning fees to be charged, together with plans giving authorities greater powers to take measures against those who do not build once a permission is granted.

Private Developers

The government describes itself as supplying a planning framework that supports more development. They mention that they will encourage a greater diversity of homebuilders, in an attempt to move away from the present situation were around 60% of new homes are built by just 10 companies.

The aim is to support smaller homebuilders in partnership schemes with government and to help them access the finance they need.

Housing Associations

The government has announced increased funding to Housing Associations and is encouraging the expansion and delivery of affordable homes.

The government is also calling on lenders to back developers and mentions simplified plans for utility and infrastructure suppliers, together with ‘an improved approach to developer contributions to help pay for new infrastructure.’

Green belt

Despite the above, the government will reaffirm its commitment to protecting the green belt, unless Local Authorities can demonstrate exceptional circumstances.

In essence the government is increasingly in favour of residential use on ‘appropriate’ sites, and despite some seemingly contradictory initiatives for achieving this, the growing climate in favour of residential developments, offers opportunities to landowners and those interested in exploring conversion opportunities.

With experience in planning matters, if you feel you may have a suitable site or potential to convert current property, contact Butler Sherborn for an obligation free appraisal.