The government remains committed to housing supply and its aim to build 300,000 homes per year by the mid-2020s. It still aims to encourage diversity of supply, for example funding to encourage build to rent. This is in the context of over one million people on waiting lists and increased homelessness.
Oliver Letwin in his draft report has concluded that while the big housebuilders are not land banking per se, they will only build out at the rate that allows them to sell at the price of second hand property in an area.
This absorption rate model means that without other tenures, government will not achieve the targets set.
It was noted that individual housebuilders were prepared to take lower margins on schemes where they could sell the build to rent and affordable rent and that they were basing decisions on risk blended margins rather than standard 20 to 25% operating margin. This approach helps manage cash as money comes into business earlier and enables quicker delivery.
The Social Housing Green Paper which is likely to have some implications for the sector is anticipated.
For housing associations, the Future Shape of the Sector Commission is putting forward the argument that housing associations should both seize the opportunity of a new consensus to build more social rent homes whilst still continuing to build homes for sale and rent, operating across the whole housing market.
From housing associations there was also a call for greater flexibility at section 106 stage to enable them to manage the cycle. Attention was particularly drawn to the resilience of the shared ownership product given its ability to defer surplus on private sale.
Share News Article
Date:
Sponsors:
Contributors:
Richard Donnell, Research and Insight Director
Hometrack
Austen Reid, Group Director of Development
Clarion Housing Group
Will Rutter, Partner
Winckwood Sherwood
Read the full report for practical insights and analysis.
You can download it below.