Housing: behind the numbers
Each year seems to see a new housing minister installed and the inevitable new announcement and policy re-launch to address the perennial issue of how to build the houses the country needs.
The latest announcement and consultation comes against the background of 227,000* new homes coming onto the market and planning permissions granted by local planning authorities exceeding 320,000*. The 227,000 figure needs to be seen in the context that once demolitions, business to residential conversions etc. have been netted off, only 183,000 new build homes were actually built. Even so, the figures are a significant improvement since the 2008 crash and represent one of the best build rates for thirty years.
Recent research from the HBF also suggests that there is about a three-year lag between permissions granted and actual houses built. That doesn’t mean that in three years we will be building over 320,000 houses, from a crude calculation there looks to be about a 20 - 25% gap between permissions granted and new homes coming onto the market. Even so that trend, if maintained, would suggest that in 2020 we could be achieving a rate of around 250,000 per annum, the highest rate for over thirty years.
Given those trends, one has to ask if the latest announcements and consultations are targeting the right issues. Local planning authorities look to be playing their role, granting almost 10% more permissions than the Government’s target of new builds. The housebuilding industry is stepping up to the plate, almost doubling the number of new builds coming to market in the last ten years and looking to maintain an upward trajectory.
The elephant in the room seems to be the issue of affordable – sorry – social housing delivery. The latest figures show that just 5,000 homes for social rent were built in the last year, despite a government target of 100,000.
Few, if any of the recent announcements seem to be really focused on encouraging significant step change in this area, yet as my colleague Edie Bond states in her excellent blog post published yesterday, the last time the 300,000 target was achieved was when local authorities were directly responsible for significant building themselves and were regularly building in excess of a hundred thousand homes a year.
Hopefully the Chancellor’s Spring statement next week will reveal more on this area and provide the final heave to close the gap that still remains before the ambitious 300,000 target is achieved.
*Figures are the latest provided in 2017 and are sourced from the HBF.
This article was written by Frank Browne, Consultant Director at MPC.