As reported recently in the Telegraph the Government has published a White Paper which details new proposals to support the housing sector and address some of its dysfunctional problems. Unfortunately, the Paper has misssed the opportunity to fundamentally address the real issues. The Telegraph article sets out matters which should have been addressed.
The key points are:
It hasn’t dealt with: the small house building sector; the five year supply of housing land (see picture below); no assistance for older people to downsize from a large family home to a smaller house; poor attempt to deal with affordability for first time buyers; no new initiative on council house building.
CREDIT: NATHANIEL LICHFIELD & PARTNERS
A new report from the Home Builders Federation (HBF), published yesterday, highlights how small and medium sized housebuilders are facing significant obstacles to their businesses in the form of unnecessary red tape. It is estimated that at least 25,000 more new homes could be built every year if current regulations were to be relaxed.
There is particular concern that it is has become difficult for new housebuilding companies to grow to any significant size, in contrast to larger housebuilders who are seeing their growth hold steady. In order to increase new housing numbers to a level meeting government targets, the report says that small and medium sized housebuilders must grow at a faster rate – particularly since the vast increase in the number of new homes being built over the last decade has been almost entirely due to expansion by larger housebuilders.
Various recommendations are made in the report, including using Brexit as an opportunity to reform regulations on housebuilding, making it simpler to build new homes quickly.
Source: Property Investor Today
A gauge of U.K. house prices rose to a seven-month high in November as the supply of properties for sale failed to keep up with a moderate increase in demand. The Royal Institution of Chartered Surveyors said its index rose to 30, the strongest reading since April, and that “supply shortages remain a constraining feature” in the market. Respondents to its monthly survey expect prices across the country to rise in the coming three months, but were less confident about London’s prospects because of tax changes. Britain’s economy has performed better than expected since the June vote to leave the European Union, and mortgage approvals rose to a seven-month high in October. However, the Bank of England warned last month that the outlook is uncertain, and RICS said a slowdown in transaction activity may indicate that the current strength in the housing market may not last. A net 13 percent of surveyors reported a rise in new buyer inquiries last month, near a record low. “The ongoing supply shortfall, with stock levels around historic lows, and the myriad of tax changes impacting on buyers suggest that any pick-up in activity will be relatively modest,” said Simon Rubinsohn, RICS chief economist. “This is significant not just for the housing market itself but also for the wider economy given how much of consumer spending is tied in with home purchases.”