Whilst the national press choose to focus on figures that show the UK are falling woefully behind UK government home-build targets, recent government press releases focus on telling us new home building has reached a three year high with new home numbers rising by 11% this year alone, the highest annual total since the 2008 property crunch. https://www.gov.uk/government/news/britain-building-again-as-new-homes-rise-by-highest-level-in-8-years
So what factors could be driving these increases?
Despite strong demand and rising prices continuing, builders still face a number of issues, with planning constraints, skill shortages, a lack of land supply and a reluctance to lend, to name but a few. However, it would appear the government remain committed to “turbocharge housebuilding, so more people can have the security of their own home” Housing Minister – Gavin Barwell.
Even the 2016 Autumn Statement touches on some positive themes to “get Britain Building again”.
The introduction of planning reform seeks to address the bureaucratic, time consuming and costly planning processes typically faced by builders. The Neighbourhood Planning Bill http://services.parliament.uk/bills/2016-17/neighbourhoodplanning.html currently going through parliament promises to speed up the planning process for builders through various measures, including improved use of planning conditions.
Lack of available land is always an issue, so builders have also had to make good use of innovative housing solutions, such as creating further residential space through change of use applications, and additional scope through conversions of existing properties into multiple dwellings.
And with the government promising to release more public sector land, again in the 2016 Autumn Statement, builders should be provided with further opportunities, and greater access to land earmarked for development.
Following the financial downturn the construction industry was also hit particularly hard by major banks feeling reluctant to lend, driving many small builders into financial ruin.
The Autumn Statement also reinforces promises to set aside a £3 billion Home Build Fund (available until March 2021) for sites of five or more houses to facilitate 200,000 new homes which, coupled with The National Planning Policy Framework providing that smaller developments of 10 or fewer houses do not have to pay Section 106 contributions, or make provision for affordable housing units, surely builders both big and small are finally facing better times.
The government has, however, on the altar of helping first time buyers, brought in a raft of measures including restricting tax relief to higher rate tax payers, and the 3% stamp duty hike aimed at the buy to let investor. Property does however still remain attractive in return on capital compared to other forms of investment, and the buy to let market may well continue to be resilient and robust.
At Thursfields we like to look at things differently too, which is why we have a dedicated New Homes Division for builders both small and large. With strong links to local Land Agents and Planning Consultants through to investors, our experienced Commercial Property Department have all the tools needed by builders to facilitate land acquisition and advise upon both commercial and private equity funding, or the planning process.
We can also guide you through the various available government schemes, such as Help to Buy Loans and ISA’s, and Home Build Funding loans.
And our Residential Property Department, headed up by Louise Jones, whose legal background is strengthened by many years’ experience with one of the UK’s leading housebuilders, houses a plot sales team with over twenty-five years’ experience of plot sales between them, enabling them to professionally package each and every sale, to ensure quick turnaround of sales to improve cash flow for builders.
In turn this means you the builder can get on with what you need to do; namely KEEP BRITAIN BUILDING!!!
For more information on our New Homes Division please contact Thursfields’ Head of Residential Property Louise Jones on 0121 796 4021 or Head of Commercial Property Tony Gibb on 01905 730450.