Urgent call for housing supply focus, following Brexit
The Government are pressured to put more focus on the ongoing issue of housing supply, following recent reports.
Last month, a report from the House of Lords Economic Affairs Committee titled “Building more homes” was soon followed by the appointment of the new housing minister, Gavin Barwell who will be looking into achieving the targets set.
So what is the outlook for the residential property market?
According to the report, former housing minister Brandon Lewis had abandoned the previous target for home building after the UK referendum result. Furthermore, the given target of 200,000 new properties per year hasn’t been met within the last decade. The report looks to housing associations and local authorities for this downfall, who are said to focus on profit margins as opposed to supply.
Despite being able to lend without limit for various public facilities, for example, there is a set amount the Government will give for supply of social housing, which the report is calling to be lifted.
The report also states that Government efforts to boost supply of land hasn’t been achieved.
Mirroring other reports that show new build approvals in the capital are on the rise, the Committee raise the issue of discrepancies between planning permissions and the actual building of homes. The reason for this may stem from predictions that were made of the pound weakening due to Brexit, which could lead to the surge in price of construction materials, according to the Federation of Master (FMB).
Given the results of their State of Trade Survey for Q2 2016 Brian Berry, Chief Executive of the FMB, said: “Following the EU referendum, the plummeting value of sterling has further complicated an already difficult situation for small construction firms. Even prior to the referendum result, nearly two in three bosses were anticipating rising material costs, on which there has been intense pressure over the past couple of years, as demand for projects has picked up again.”
Berry continued: “It’s important to note that this survey was conducted prior to the referendum and shows that SMEs were consolidating their recovery, with demand in the private sector continuing to pick up. If this wavers, as suggested by recent ONS stats showing that the construction sector is now in recession, then the Government must do everything in its power to reverse this situation and get Britain building again. Our survey shows that despite an improving overall picture prior to the referendum, public sector workloads for smaller firms continued to decline – a trend that has gone on for too many years. A significant programme of publicly-funded capital investment in crucial areas such as housing and infrastructure, along with a renewed focus on improving public procurement processes for SMEs so that they can benefit from these opportunities, would be enough to hush any whispers of a post-referendum recession.”