While the lack of viable developable land with planning permission has been the most serious long-term barrier to housing delivery, in the short term mortgage lending has been more significant.
In this area too, 2013 has brought progress. The Government-backed NewBuy scheme has gained considerable traction, with a weekly average of 130 reservations, almost double last year’s average, resulting in a current cumulative total of more than 3700 reservations. The doubling of reservations under NewBuy this year has come in partnership with a general lowering of mortgage rates – triggered by the Funding for Lending Scheme – making home ownership more affordable.
Signs of easing in both constraints have raised hopes that developers will be able to increase production from the current very low levels, giving the country a social and economic boost. But significant threats to any potential recovery being sustained remain and more needs to be done to ensure these positive indicators are sustained. At today’s HBF Policy Conference and in its Budget Submission HBF is warning that;
* The Government’s Planning Inspectorate must continue to robustly monitor Local Plans and throw out unsatisfactory ones. Half of local authorities still don’t have Local Plans in place, despite it being a requirement since 2004. This cannot be allowed to thwart development;
* Government must maintain its support and it is vital that schemes such as NewBuy are extended to give certainty and security to home builders;
* Regulatory costs are now a huge threat to site viability. Government must act to meet its commitment to reduce costs and cut red tape;
* Medium and small businesses are still struggling to secure business finance and need support.
Stewart Baseley, Executive Chairman of HBF said: "It has been a very positive start to the new year, with signs of an easing of the two main blockages that have greatly hindered our industry. But significant threats to any sustainable recovery remain.
"The increase in residential permissions is hopefully a reflection of the positive planning principles of the new system. It is still very early days though and the increases must be sustained. Government must ensure the system continues to be underpinned by a robust appeals process where local authorities are not meeting the responsibilities they have to their communities.
"The lack of affordable mortgage lending has strangled the industry’s activity for several years and any glimmer of increased lending or lower rates is positive. NewBuy is playing a big part and gaining substantial momentum, boosted by recent reductions in mortgage rates in response to the Funding for Lending Scheme. House building is a long process so it is vital Government maintains this support.
"As Government looks for ways to maintain this improvement it must also focus on its commitment to reduce red tape costs. Direct and indirect taxation, coupled with regulation, is making many building sites unviable and has got to be addressed.
"Building the homes we need would take millions of people off social housing waiting lists and enable beleaguered young families to get a foot on the housing ladder. It could also create half a million new jobs and give the country a massive and much-needed economic boost. We are seeing progress – we now need to maintain it."
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