Do housebuilders need to speed up construction?

It has been reported in the Financial Times this week that pressure is being piled on the country’s biggest housebuilders by Westminster, writes property developer Richard Carr.

Target

Richard Carr Construction Image

The government has called on housebuilders to speed up construction

At the time, many thought the government’s announcement that it would seek to build 1million homes by 2020 as ambitious – and that sentiment is even stronger a year later.

As a result, the Westminster has turned on Britain’s biggest housebuilders to increase construction speeds to meet the acute shortage of homes. Senior members of the Conservative party have also expressed concerns over the quality of design of new homes and the lack of small and medium-sized housebuilding firms.

A rather unwelcome resolution proposed by the government is to force developers that buy publicly-owned land to commit to rapid construction, an idea Richard strongly disagrees with.

Growth

Positively, the number of developments receiving planning permission has increased in the last 12 months. Interestingly, they have increased at a faster rate to the amount of homes actually being completed.

Following the banking crash a number of small to medium sized building firms went bust, whilst the larger firms stayed afloat thanks to help from the government. However, the government is now complaining at those big companies for not increasing output.

Stewart Baseley, chairman of the Home Builders Federation (HBF), said his members had already increased output significantly. “The industry has delivered unprecedented increases in supply over the past two years,” he said.

His comments in the Financial Times were supported by HBF date which illustrated that the country’s largest housebuilders had increased output by 50% since the housing market crash between 2009 and 2011.

Like Richard Carr, Mr Baseley believes changes to the planning system would help improve housebuilding rates. “[The government] needs to work with local authorities to speed up the planning system and ensure local plans allocate enough sites of different types and sizes that are attractive to a range of companies.”

Construction

In answer to the blog title, Richard Carr believes housebuilding rates will increase when more firms are enticed back into the market, not when construction speeds up. However, following what happened when the industry crashed he believes the government will have to make it extremely attractive for firms to risk re-entering.