With Jeremy Hunt set to deliver his Autumn Statement this week, Terry Bacon, finance director of Bewley Homes, shares his thoughts on what the government needs to include in the announcement to address the housing crisis.
The government needs a new strategy to impact housing delivery and it needs it now, not in a year’s time. With the general election race looming 12 months from now, Labour has pinned its colours firmly to building more homes if the party gets elected.
It would be welcome news for the government to announce some measures or initiatives this week in the Autumn Statement and deliver some good news for the beleaguered housing industry.
The fact is the UK’s Gross Domestic Product (GDP) is currently showing almost no growth, with +0.2% reported in Q2 2023 and no change forecast in Q4. Next year will follow a similar pattern.
If the UK is going to get itself out of the current cost of living and economic crisis, housebuilding will be a big part of the solution.
The government’s own housebuilding target was 300,000 new homes per year four years ago. The current build rate is around a third of that. There are a number of factors for this, which are well documented in the media, but a broken planning system is central to this demise with 100,000s of units held up in planning.
But the facts are there – 100,000 new homes built adds 1% to GDP, so in rough terms 200,000 more houses would add +2% to GDP.
Increasing GDP increases tax revenues, enabling the government to better fund public services which allows it to address doctors’ pay, reduce NHS waiting lists, increase cost of living support, maintain pensions, and ensure the country is in a better place.
Add to this the current housing crisis, the social problems of soaring private rents, lack of social housing, and an average age of first-time buyers of over 33 years old – which all would be helped by increasing housing supply.
Of course, Bewley Homes isn’t the only housebuilder that wants to build more homes – both private and affordable. We have well over 1,500 units tied up in the planning system currently. If the planning environment was fixed, Bewley could double its output! We aren’t the only ones.
There is a clear and obvious need to unburden the planning process. There isn’t one single fix but a number of essential measures that the industry has been crying out for. One of the key factors is attracting more professional planning officers across the UK. The current situation is dire, with most council planning teams failing to churn through the workloads.
But fundamentally, the issues we face are with elected members on local councils who find every reason to turn down planning permissions due to the pressures from NIMBYs. To combat this, a heavily enforced top-down housing target for each council is needed with an emphasis on ‘enforced’. Decisions, at committee or appeal, on new housing applications should lean towards a positive determination where councils don’t have their housing plans in place.
Finally, a survey amongst Bewley staff on what they would like to see in the budget to help them revealed no surprises. Those looking to become first-time buyers are hoping for a government stimulus or incentives similar to Help to Buy, which proved so popular and did so much to support housebuilding. Those with families are seeking the opportunity to trade up while those nearing retirement and a potential downsize, which would free up those in-demand family homes for the market, would like to see stamp duty reduction.
It’s safe to say there is plenty at stake with the chancellor’s upcoming Autumn Statement, and those in the industry and potential buyers alike will be watching to see what the government has planned to tackle the ever-worsening housing crisis.
