Sunday, August 04, 2024
Can the UK Government meet its housing targets?
The Independent reports that the boss of a major housebuilder has warned ministers of the real cost of achieving their ambitious housing targets.
The paper says that Rob Perrins, the chief executive of Berkeley Group, said his organisation welcomed the government’s plans to build 1.5 million new homes in five years, but in an article for the paper he said the “rub” was “the cost, and, in one word, what our country needs is investment”:
Berkeley Group is one of the country’s largest homebuilders and constructs around 10 per cent of London’s new homes.
Mr Perrins has now written to Ms Rayner and Rachel Reeves to outline his company’s plans to build an extra 10,000 homes by 2029 as part of that 1.5 million target.
His group is also investing in new land, having not bought a significant new site in more than two and a half years.
And he said he applauded Ms Rayner’s plans to break the deadlock in planning and ensure more homes are built.
But he warned that “significant challenges” still had to be overcome.
These include high interest rates and mortgage affordability rules which have left more than a third of first-time buyers reliant on friends and family for help with their deposit.
He also warned that when it comes to infrastructure levies, “too often the money is diverted into other areas for the local community. Potholes were the last government’s favoured fund diversion.”
He also said that the Community Infrastructure Levy, which can be charged by councils on new developments in their area, has reached £75,000 per flat in some areas of London.
“Costs of this scale are only faced by residential developers, meaning housing cannot compete with other land uses on a level playing field,” he warned.
In addition “recent regulations on design, energy efficiency, second staircases, biodiversity and much else are individually justifiable, but collectively add costs that must be accounted for by the planning system”.
If the government is relying on private housebuilders to build these homes then they will need to ensure the companies involved can make a profit from doing so and that will mean making some unpalatable decisions regarding planning, as well as ensuring people can afford to buy them.
The real issue is affordability, something that ministers cannot rely on the private sector to enable. If Labour are serious about providing homes where they are most needed then they will need to provide significant amounts of public subsidy and ensure that local councils and housing associations are sufficiently resourced to build the social housing that is required. They will also need to invest in infrastructure. This target cannot be met on the cheap.
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Fiscal rules have to go .The govnt can BORROW the money to build SOCIAL HOUSING and leave builders to do the rest .Yes it means we have to pay a debt off over the years. We paid off the WW2 debt off by 2006. DECADES LATER. If we do not have forward, imaginative thinking we advance at a snails pace and lag behind other countries. Fortune favours the brave.
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