HOUSING
Tackling the housing crisis – next steps for the government
The housing system is in crisis with fewer homes being built at precisely the same time when there has never been a greater demand for affordable homes. The new government needs to tackle the problem urgently and find solu- tions to help the 90,000 homeless households trapped in temporary accommodation and the estimated five million people on social housing waiting lists, says Brian Berry
Brian Berry is director of external affairs at the Federation of Master Builders
years. A recent survey from the Office for National Statistics reports that the population is expected to rise by 10 million to 70 million in 2033. This is less than half the time it took to increase from 50 million to 60 million between 1948 and 2005. Coupled with increasing demand is the issue of affordability with 70% of towns now unaffordable for key workers. All this puts even more strain on an already overstretched social housing sector.
A Building more homes
Figures published by the government in February revealed that house building in 2009 plummeted to its lowest level since 1946. Just 118,000 were built in England - 17% fewer than the year before - and this dismal picture is set to get worse with house building forecast to fall even further this year to the lowest level since 1923.
The National Housing and Planning Advice Unit stated in August 2009 that at least 237,800 new homes are needed every year from now until 2031, so the case for a massive increase in house building is undeniable. However, if we are to begin to get back to more normal levels of house building then there are a number of critical issues that need to be addressed. These include mortgage liquidity;
42 pse
ll the indications point to increased demand for housing over the coming
site viability; reforming the planning system and sorting out the funding issue. Unless each of these is addressed there will be no real hope of significantly increasing housing output for years to come.
Mortgage liquidity
Mortgage liquidity is currently the most critical issue because house builders can only build homes that people are in a position to buy. Without mortgages that can people realistically afford the current housing crisis cannot be solved. The problem is further complicated by the fact that most social housing today relies on contributions from the private sector through Section 106 agreements which means that the planning system is inextricably linked to private house sales.
As a result, if house builders fear they will not be able to sell sufficient private homes to fund the affordable homes they are required to build on their sites under Section 106, then fewer homes will be built.
Site viability
Site viability is another problematic area as is the increasing impact of regulation. The cost of this, combined with the drop in house prices, has severely damaged the availability of developing land.
The property boom that preceded the recession allowed
national and local government to demand more and more from house builders. However, the fall in house prices, and future policy requirements such as the Community Infrastructure Levy and zero carbon targets, are threatening to make the majority of future residential development unviable.
The affordable housing requirement is expected to cost around £30,000 per property, the zero carbon requirement a further £30,000 per property, and other regulation anywhere between £5,000 and £20,000 per property. All these additional costs which have been overlooked by government will affect the viability of future housing development and need to be challenged.
Local authorities need to be realistic about what they expect developers to be able to contribute. Previous assumptions about the feasible scale of planning contributions need to be reconsidered in a world of reduced land values and property prices.
Against this background a complete rethink is needed about developer contributions with a view to abolishing both Section 106 agreements and the Community Infrastructure Levy and replacing them with a new tariff system. This would have the advantage of both simplifying the negotiation process and providing greater certainty for developers
Jul/Aug 10
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68