Housebuilding won’t recover unless viability and buyer confidence improve, experts warn
Many agreed that higher build costs, infrastructure requirements, affordable housing obligations and regulatory burdens mean the economics of housebuilding no longer work across large parts of England.
England’s housebuilding model is under severe strain and won’t recover unless the economics of development, operating conditions for builders, and demand-side support are addressed, according to senior leaders at the Saving Housebuilding conference hosted by Savills and Public First.
Many agreed that higher build costs, infrastructure requirements, affordable housing obligations and regulatory burdens mean the economics of housebuilding no longer work across large parts of England.
Calls were made for the Government to reset viability and land value assumptions and focus on sites that can deliver quickly, using Homes England and programmes like the New Homes Accelerator to unlock more complex sites.
Research from Savills found a renewed equity loan scheme could support up to 85,000 homes by 2029 and generate almost £24bn in additional GDP over three years.
Pre-pandemic sales rates were around 0.8 homes per outlet per week, now down to 0.4 or lower for SMEs.
Developers would need twice as many outlets to maintain delivery if sales rates halve.
The conference agreed a targeted support scheme is needed to maintain capacity and avoid loss of skills and supply chains.
The consensus was an equity loan scheme should focus on helping creditworthy first-time buyers (FTBs) access new homes.
Research by Public First found affordability is the key factor shaping support for new homes.
The conference showed people are more supportive when they believe development will help local people, younger generations and families stay in their communities.
Patrick Eve, head of UK regional development at Savills, said: “This was a really engaging conference and one which perfectly articulated the various issues affecting housing delivery and industry confidence right now.
“There were some great contributions across the panels which underlined the work that needs to be done in order to restore confidence and increase delivery.
“Whilst some of that is outside of our control, what we can do as an industry is work together to find the solutions that both ease some of the challenges we currently face and highlight the many community benefits that housing developments can bring which hopefully results in a more affordable housing market, a stronger construction sector, and a planning system that commands greater public confidence.”
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