Mon 14 Apr 2008
Counting the costs
Tim Hough, chief executive of Miller Homes, has backed Home Builders Federation boss Stewart Baseley's warning that the government ignores what the housebuilding industry has to say at its peril. In his April column in Show House magazine, Baseley, executive chairman of the HBF, re-ignited the debate on the best future use of rural land.Examining long-term trends in population, migration, employment, and demand for homes, to accurately “examine the pressures on land use and potentially identify opportunities to rebalance the green belt”, Baseley argues that it is obvious large numbers of new homes have to be built.
This is a view shared by many in the industry, including Tim Hough (pictured), chief executive of Miller Homes. However, the regulatory burdens lumbered on today’s housebuilders are proving costly, literally and may prove detrimental to housing supply levels in the long-term.
"Too many parties do not take the cost issues seriously," Hough told Show House online. “They look at housebuilders’ declared profits and have little sympathy, but that is a naive position to take. They simply do not understand that increased costs lead to lower land values and landowners are not obliged to sell at any price. So the viability of development is of huge importance to housebuilders, landowners and all those who accept the need to increase supply.”
Housebuilders have already got to contend with greater infrastructure costs, fresh zero carbon requirements and increased private sector subsidy from land values through s106 planning obligations, “all of which will take a large chunk of costs from our bottom line,” says Baseley. Now, additionally, there are the lifetime homes proposals to deal with.
Peter Andrew, land and planning director of Taylor Wimpey, said: “The collective economic cost of the new regulatory requirements is considerable and only adds to the pressures housebuilders are already experiencing. Taylor Wimpey takes the issue of the environment seriously and fears the law of unintended consequence could really apply in this case. The well-intentioned drive to enhance the environmental performance of new housing could become derailed by sizeable costs.”
Figures complied by John Stewart of the HBF estimate that the combined cost of affordable housing subsidy stands at around £30,000 per plot, the cost of achieving Code Level 6 - £30,000 per plot and CIL tariff at an assumed average £10,000 per plot will add up to £2.8 million charged per hectare, according to Baseley.
“The increased cost of regulation will restrict supply and it is high time someone listened. One day, those who campaign against development and who help to restrict supply will have to live with the consequences of young adults unable to secure a basic human need, a roof over their head," said Hough.
Andrew has called on the government to open talks with housebuilders, regarding both new build housing and the environmental impact of existing housing stock.
Posted by Marc Da-Silva
in Home Builders Federation (HBF), John Stewart, Miller Homes, News, Peter Andrew, Stewart Baseley, Taylor Wimpey, Tim Hough on Mon 14 Apr 2008
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