2017 Housing Delivery Increases
January 2018

Erik Pagano

2017 Housing Delivery Increases – No Cure Yet

The latest Government figures show that more than 183,000 new homes were built in 2017, an increase of 12 percent over 2016 and a 55 percent increase over the last four years.

2017 Housing Delivery Increases

Erik Pagano

This has resulted in 577,690 more new homes than there were three years ago.

These latest statistics from the HBF suggest that planning reforms are having a positive result, but the industry is now calling on the Government to provide more certainty on the future of the Help to Buy initiative after 2021, to remove barriers for SMEs, start-ups and to push forward proposals for further planning reforms in the White Paper.

HBF Chairman Stewart Baseley, said that “The statistics illustrate the huge progress being made, and the rapid rate at which builders have responded to the positive measures from Government to deliver more new homes. It is no coincidence that, since the reform of the planning system in 2012 and the introduction of the Help to Buy scheme in 2013, the housing supply has increased by a massive 74 percent.”

This is all good news, but the latest figures must be viewed against the long-term housing need of 250,000 new homes per annum over the next ten years. Add to this the unmet need from the last 10 years and the figure gets closer to 300,000 p.a. So, whilst the increase represents progress, it’s still well short of what’s required.

Housing delivery since the war shows that the private sector has never been able to deliver more than about 200,000 per annum with any consistency and often a lot less. This suggests that alternative long-term sources of delivery are required.

Many Housing Associations are talking a good story of achieving a step change in their private housing delivery, and many of them are well placed to do so, but it will probably take longer than they think to achieve the numbers in their business plans. However, once they get themselves up to speed they should provide a significant addition to the mainstream housebuilders and over the long-term.

The little talked about self-build sector is also set to expand delivery following the recent introduction of the Self-Build & Custom Housebuilding Act. Currently, a surprisingly high, 8% of all UK housing is delivered via self-build but this rate could double over the next five years under the new permissive legislation. This could mean delivery of over 30,000 units per annum, which would be a major contribution. It’s also a very positive planning mechanism to harness, as self-build is frequently perceived locally as the acceptable face of new housing.

The SME housebuilder sector is seeing something of a resurgence and the Government, via some very attractive HCA loans, is putting a lot of effort into broadening the market to provide alternatives to the national housebuilder oligopoly. Having strong local and regional SMEs is healthy for the sector as a whole and just getting the number of SMEs back to 2007 levels would produce an additional 25,000 homes a year.

Add to this the growing PRS sector and between them they could add up to more than 100,000 new homes a year, taking total delivery towards the actual need.

In making changes to NPPF, however well intentioned, the Government must take great care to avoid the trap of introducing complication and delay, otherwise it risks stifling the very sectors it wants to encourage; these are the very businesses that find it most difficult to navigate through a complicated, expensive and risky planning system.

Whatever the commercial and planning incentives introduced by the Government it appears there’s still a way go to close the gap between housing delivery and housing need. So 2018 looks like being another busy and challenging year for the industry.