RICS downplays government’s 1 million homes target as “not such an ambitious ambition”

The Royal Institute of Chartered Surveyors has poured cold water on the government’s stated ambition to build a million homes, saying “it doesn’t seem as ambitious as some may think.”

It comes as the government announce they intend for one in five of those homes to be “starter homes”.

Simon Rubinsohn, Chief Economist for RICS said: “There’s been much scepticism expressed in recent weeks about the government’s target to deliver one million new homes (in England) during the lifetime of this parliament. Well I’ve taken a look at the figures, and it doesn’t seem as ambitious as some may think.

“The individual components of their goal includes: 200,000 “Starter Homes” – an initiative still working its way through parliament and 135,000 shared ownership properties – about which little has been said to date.

“It’s also a function of official data on housing starts which show that a mere 144,000 new units were begun through the course of 2015.

Simon Rubinsohn also argues that the numbers aren’t entirely transparent, with net supply numbers being more useful, as these are based on the combination of completions , properties obtained through change of use and demolitions.

Simon continued: “On the basis of the higher number of 180,000 (gross additions to supply) [with demolition bringing this down to 170,000 – ed], the government doesn’t appear that far off its ambition for 2020.

“None of this is designed to minimise the fundamental nature of the housing crisis which reflects the fact that household formation is still projected to comfortably outstrip projections for the supply of new units (even on the most generous calculations).

“This is also clearly visible in the estimates by our professionals for medium term growth in house prices and rents. The February Residential Market Survey suggested both are likely to increase by at least another fifth over the next five years comfortably outstripping the probable rise in wages.”

Starter homes will be available at a discount for under 40s and can only be resold to other first time buyers at a discount for five to eight years to discount speculative buying. They will also be available to injured military personnel and partners of those who lost their lives in the armed forces.

Announcing the proposal for one in five new homes to be so-called starter homes, Housing and Planning Minister Brandon Lewis said: “We want to ensure young people who aspire to own their own home can settle down and enjoy the security home ownership brings.

“This is why we have committed to building 200,000 high quality homes exclusively for first time buyers backed by £2.3 billion government funding to get building under way including on brownfield sites.

“Today’s proposals mean starter homes will be built on hundreds of housebuilding sites across the country, encouraging private and affordable housing is built side by side in mixed communities.

“It’s absolutely right that we provide help and homes for our heroes, that is why we’re proposing that starter homes should be available to injured soldiers and partners of those who have made the ultimate sacrifice for our country.”

The consultation on details for the regulations to be made under powers contained in the Housing and Planning Bill runs until 18th May.

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