Only 216,000 new homes were built in 2020
More is needed from the government in order to solve the housing crisis, according to Jason Berry, group sales and marketing director at Crystal Specialist Finance.
A report commissioned by National Housing Federation and Crisis, from Heriot Watt University, has suggested that 340,000 new homes are needed in England each year, of which 145,000 should be affordable. Yet only 216,000 new homes were built in 2020, down from 243,000 in 2019 and the trends since the 1960s have been poor, outlined Berry.
“If suitable housing is unavailable then overcrowding occurs, more young people live longer with parents, labour mobility is poor meaning it becomes harder for businesses to recruit staff - finally homelessness levels will inevitably increase,” he added.
However, according to data collected by the government, there were 49,470 completed homes in the first quarter of 2021, which is the highest figure in over 20 years and a 4% increase compared to the last three months of 2020.
In addition, during the same period, 46,010 homes were started, the highest number in nearly 15 years and a 7% increase on the previous quarter.
Looking to potential solutions, Berry believes to avoid the worst impacts of the ongoing housing shortage crisis, more needs to be done at a national and local level to make up the lost ground due to house building stalling during COVID-19.
“It’s an effort which will require both increased long-term commitment and investment,” he added.
Berry thinks that local authorities and housing associations have a huge part to play in assisting the housing market and consumers.
“Delivering affordable housing has to be the priority, crucially, as we continue to see vast numbers of individual’s and family’s finances still recovering from the pandemic,” he said.
What is the solution?
It has been suggested that a return to 100% loan-to-value (LTV) lending could resolve the housing crisis - although this has been met with concern, as industry figures fear a repeat of the 2007/2008 financial crash.
Looking to other potential solutions, Berry pointed towards effective town planning and essential implementation of infrastructure around new housing developments, which he believes needs to be considered in tandem with the setting of realistic targets.
“All of these will require major public sector investment in housebuilding programmes and a keen focus given not just to the quantity of houses built, but also the quality of them,” he said.
For housebuilding programmes to be efficient, Berry believes that more needs to be done to speed up the freeing-up of suitable land available for development, in addition to this land being made available at competitive and fair prices.
Earlier in the month it was suggested that by having fewer housing ministers, this would enable one minister to be able to dictate policy better and improve the housing crisis in a more consistent fashion. Since the Conservative Party came to power in 2010, there has been 11 different Housing Ministers.
Read more: "We need fewer Housing Ministers"
Additionally, Berry believes that more should be done so small and medium sized (SME) building firms are given opportunity to contribute, instead of large building companies unfairly dominating the market.
The government announced its target to build 300,000 new homes a year in Philip Hammond’s Budget in November 2017, however it has never managed to reach this figure.
Prior to 2020/21, new housing supply had been increasing year-on-year since 2013. Relaxed planning rules around converting non-residential premises to residential use contributed to some of this increase. With people increasingly living for longer, this has left many older families remaining in bigger properties for longer, and in turn this has meant that many new families are unable to upgrade their homes in line with their expanding families.
Finally, Berry believes the construction industry needs to be in a fit state to deliver the housebuilding capacity required, with factors such as labour demands, apprenticeships and upskilling of workforces, including access to a healthy supply chain of materials, playing a crucial role.
“Unfortunately, there is no silver bullet to solve all the considerations above, however, with collaboration and commitment across national and local government, and development of the construction industries, we can turn the downward housing trend upwards,” he concluded.