Many cities are currently flooded with flat developments and government policy has emphasised the need for more affordable housing.
However, according to Paul Walshe, head of lender services at Moore Blatch, the fact it takes between five and seven years from allocating the land to completion meant developers could not change what type of property they built in the short-term.
He said: “We have already seen areas like central Manchester, where there are large developments of one and two-bedroom flats and demand has fallen away. But the lead-in periods are so long that developers can’t react to changes in market demand. You can’t say three years into a development that there are too many flats so we shouldn’t build ours – it’s just not feasible.”
Walshe pointed out that oversupply had already affected many areas across the UK and was creating problems for local communities, who were seeing the value of their property decrease.
Neil Johnson, head of PR and policy at the Building Societies Association, believed developers were in a no-win situation.
“Delays in the planning system create an artificial barrier to developers as they can’t react to the market as quick as they’d like. They are criticised for land banking but it takes so long to get planning permission and developers need a supply of land for the future so they can’t help but build up land. If the government is serious about housing, it needs to speed the planning process up.”
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