Later this month, Chancellor George Osbourne will present the UK government with his 2014 Budget. One of the key questions that Mr Osbourne will be looking to answer will be, how to build more homes but keep prices affordable? We take a look at what the future holds for Britain’s housing industry.
Britain’s housing market is definitely undergoing a renaissance at the moment. New homes are being built, and government led schemes like Help to Buy have helped a lot of first time buyers get onto the market.
But a recent article from the BBC suggested that this might not be enough to provide the affordable housing the country needs.
The National Housing and Planning Advice Unit (NHPAU) has estimated that the country needs to build 280,000 new homes a year, if it is to keep up with the demand for housing and also keep prices at an affordable level.
The Home Builders Federation has called for higher levels of home building, and a tapering rather than an abrupt finish to the government’s Help to Buy scheme.
But not everyone believes that the problem with house prices lies with the inequality between supply and demand. The Campaign to Protect Rural England believe that house prices are defined by the current market and the price of new homes will make little difference.
Fiona Howie, head of planning at CPRE, told the BBC “new house building is a remarkably inefficient means of improving housing affordability.”
Her views will strike a chord with traditional Conservative voters, asserts the BBC, who are largely homeowners and therefore unconcerned about the building of new houses.
Two such voters, interviewed by the BBC seemed to suggest as much. Laura Dannan believed that new houses put pressure on existing facilities. She said, “because I’m already in the housing market, I’m OK.” Yvonne Bennett seemed to echo her views saying, “I think they should utilise what they’ve got.”
The problems of building new homes are quite simple. Britain needs new homes to keep up with a swelling population.
The government has attempted to give local authorities the ability to build new homes, in particular by improving the planning process. The National Planning Policy Framework means that local authorities now have more the ability to identify their housing needs and allocate land appropriately.
The issue with this however, is that half of the councils that are involved have still not got any policy in place. Despite a loosening of many planning restrictions there are still many blockages.
The real question is, will Chancellor Osbourne use his budget to launch a campaign to build more homes? Sadly, his own words included in the BBC article seem to suggest that he is not holding out much hope.
According to the BBC, Mr Osbourne told a House of Lords committee that he believes Britain’s housing shortage will last well into the next decade. He said, “in 10 years time (we’ll) still be talking about the challenge of making sure that our housing supply (keeps) up with housing demand.”
We can only hope that Mr Osbourne’s words are not prophetic, and that in 10 years time Britain will have a house building industry in rude health.
Are you building a new home and want to speak to a chartered surveyor? Call Jon Battle on 0151 486 3437.