Affordability: are political differences stifling house building?

Are political differences stifling housing development when we just need more homes?

Are political differences stifling housing development when we just need more homes? Where affordable housing does occur, do the economics make poor quality inevitable? What will stimulate a dramatic increase in delivery? What part can smaller developers play and how?

 

All parties of all political complexions state that the need to build more housing of all types is high on their agenda.  It is clear that all parties agree that we have a housing crisis with affordability being a key factor particularly in the South.  The danger however  is that parties put their political battles above the basic need to deliver more housing.  We have in central Government the constant revolving door that is the identity of the Housing Minister and in London we have Local Authorities running political battles over how to deliver increased housing numbers.  None of this is actually expanding the numbers of homes delivered in a year.

 

Over the years we have had a number of high profile reviews, green papers and white papers with the current Social Housing Green Paper being published and the Sir Oliver Letwin Review being expected in the Autumn. There are no surprises that the speed of delivery of housing has been identified as being a key issue.

 

There are tools and opportunities to now really focus on the key issues. All parties agree we need an accelerated release of public land that is not just land held by Local Authorities or Homes England but includes the MOD and the Health Department as well as other government ministries.  This is an easy win if the Government gets all departments to work together and accelerate the release.  At the moment this is not happening with the knock on effect of the bigger schemes taking too long to get on site.

 

Infrastructure delivery again has been universally acknowledged as being key to the accelerated delivery of homes.  With Homes England now holding the Infrastructure fund, there is a real opportunity to unlock sites and drive development forward.

 

Affordability is a key area both in terms of homeownership and in terms of rent.  The Government’s Social Housing Green Paper makes it clear that they want to help lose the stigma attached to social housing and want to ensure that quality is delivered.  The danger is that developers and contractors if they are being squeezed on their margins, may value engineer the design and quality may suffer. It is vital that there are design codes and design requirements in place and that they are embodied in the legal contracts.  It is also very important that Local Authorities and other bodies that are in a position to influence what should be prioritised on a development are clear on what their priorities are. For example, if design and quality is of importance, then any procurement document should be structured to reflect this.

 

The Letwin report, we believe, will highlight the need for different products being promoted on large sites.  This will include modular build, Build To Rent, and the ability for SMEs to deliver smaller elements of the site allowing more units to be brought forward at the same time.  The issue, however, is that the business environment for SMEs is highly challenging and support will be required in the form of incentives to help these organisations thrive and contribute to the much needed output.

About Author

Sara Bailey

Head of Real Estate and specialising in development, PPP projects, partnerships, joint ventures and regeneration. Sara has over 20 years' experience working with a range of local authorities, private providers and central government developers to develop public and private projects. She is an expert in providing innovative structuring advice in relation to property projects and regeneration transactions. Sara is passionate about creating better places for people to live and work and believes that a good legal advisor is one that provides real solutions to allow the client to focus on the delivery of its project in the most efficient, economical way.

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