Legal experts have warned that major changes will need to be made if the incoming government is to fix the country’s housing shortage, reports Richard Carr.
Rosemary Edwards, partner and head of residential development with corporate solicitors Shulmans LLP, told propertywire.com that planning permissions, regulatory requirements, funding, the economy and lack of skills have all added to the housing shortage.
“I have heard of many major house builders being accused of land banking but this is patently ridiculous. A house builder’s business is entirely based on selling homes. If they can build them and sell them, why would they hold back?” she said.
An increase in planning and regulatory hurdles have added time and costs onto projects for developers with requirements such as Community Infrastructure Levy and s106 agreements causing problems.
Edwards also explained the problems with mortgage finance for homebuyers: “We may say that we need 200,000 new houses or more each year, but not everyone who wants a house can afford one and mortgage eligibility criteria have tightened up considerably in recent years.”
The UK’s shortage of skilled labourers is preventing the industry from growing. Despite showing signs of moving forward, its progress is being limited due to a lack of skilled workers.
The industry suffered significantly during the recession with many skilled construction workers leaving the sector. Now that the industry is growing, there just isn’t the supply of tradesman to get new houses built.
“House builders are now competing, more so than ever before, to recruit skilled labour and to maintain relationships with quality contractors and suppliers. That drives up costs and can cause delays,” said Tim Halstead of Shulmans.
The latest proposals from the government focused on encouraging small and medium sized developers back into the market. However, as a result of development costs, funding remains a major stumbling block for developers of this type. They lack the large amounts of private equity backing required.
When will politicians realise?
Richard Carr is in agreement with both Edwards and Halstead and finds it staggering that politicians can’t see the same problems.
However, he does believe an important point has been missed and one that all businesses will be able to relate to, LPAs.
He believes that time has come for the government to instruct LPAs that the ‘assumption is to grant in bold’. LPAs that refuse planning which is then later upheld at appeal, should result in the local authority being find and fees repaid to the developer. After all, they failed to deliver!
Carr also believes that building higher will help solve the housing shortage. Of course, LPAs have a sever reluctance towards this. In his opinion this would have also benefit LPAs in dealing with social housing.
Just think of what would happen to social housing contributions if every three storey apartment building went to five. Happy days for the LPAs and the developer!