Government building targets smashed to bits

Could be the biggest housing shortfall since the 1950s

Tony Ward is chief executive of Clayton Euro Risk

News last week revealed that the government’s plans to build a million homes by the end of the decade are in disarray. No real surprise to the market, there.

But now this notion of new home building on an epic scale has been publicly demolished by the very construction companies that stand to benefit most from homebuilding policy.

Over half of English housebuilders believe that the government’s target is unachievable due to shortages of skills and land.

Michael Thirkettle, the chief executive of McBains Cooper, the consultancy that carried out the research, said: “The finding that most housebuilders blame a lack of available or appropriate land may concern the government, as it has said it will give faster planning permission for more construction on brownfield sites.

Our survey suggests there isn’t enough brownfield anyway to build the required number of homes to meet the housing shortage.”

He added: “It’s worrying news for the economy with construction accounting for 6% of GDP, and bad news for the industry as well as those desperate to get on the property ladder.”

Bad news, indeed. As I’ve mentioned in many blogs before, it is my belief that this huge imbalance between supply and demand will continue to drive up house prices and make it tougher for first- time buyers to gain a foothold in the property market.

Research from the Council for Mortgage Lenders found that this beleaguered demographic is having to wait till later in life for that first mortgage: the average age of first-time buyer is now 31.

So how did we arrive at the government’s far-reaching goal? The million-homes target was announced after local authorities revealed that less than 460,000 homes were completed in England between 2011 and 2014 and the National Housing Federation, the body representing independent non-profit housing associations, argued that 974,000 were needed.

Ed Goodworth at BDO said in research on the challenges facing the industry: “We’ve reached a critical point in the UK housing sector; either fix the system or face the biggest housing shortfall since the 1950s.”

Strong words, Ed.

If this all sounds rather depressing then take heart: there are things we can do. Almost 60% of builders believe that a relaxation of planning laws would make it easier to build, helping the government towards meeting its target.

This issue comes up again and again; attempts by ministers to reduce the time taken to get planning permission for building on brownfield sites are welcome. But I refer to comments made in my blog last week: not enough space is given to new development and councils are having to change green belt boundaries.

But there’s more we can do. Just under a third of builders blamed skills shortages. We should address this by increasing the number of apprenticeships and incentivising to builders to offer more training programmes.

One million new homes has always seemed completely out of reach to me – but that shouldn’t stop us taking steps to close the gap.