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Housing shortage attributed to more than lack of open land

Construction Building 480

The housing shortage can be addressed with just 3 per cent more open land being opened up to development, the planning minister claimed last week, but experts remain unconvinced.

Nick Boles told BBC Newsnight, in his first interview since taking office. that if the amount of developed land available in the UK was upped to 12 per cent, it would effectively solve the ongoing housing shortage.

He says: “In the UK and England at the moment we’ve got about 9 per cent of land developed. All we need to do is build on another 2 per cent to 3 per cent of land and we’ll have solved a housing problem.”

“Around 88 per cent would still be rural countryside and we would have completely solved our housing needs for the next 20 years.”

In recent years, house building has slowed to the lowest levels seen in peace time since the 1920s, The number of new homes built in England increased by 7 per cent from 106,720 in 2010 to 114,160 in 2011, according to figures from the Department for Communities and Local Government.

There are currently around 110,000 homes being built per year at a time when the Government estimates 230,000 are needed.s

Legal and General Mortgage Club managing director Ben Thompson says: “If we carry on as we are with no change, it will feel okay for a while, but years down the line the fallout from inaction will become clear, in the form of social and financial problems. Change is needed, boldness is paramount, we need this, and need it now.”

Industry experts may agree that change is required but few seem to think the solution could be as straightforward as increasing the amount of land available for development.

Design Council Commission for Architecture and the Built Environment director Wayne Hemingway says the UK suffers from a lack of institutional investment in terms of housing.

He says: “In Holland, 15 per cent of institutional investment goes into housing. It is just 1 per cent in this country.”

The Department for Communities and Local Government commissioned a report, entitled ‘Review of the barriers to institutional investment in private rented homes’ in August, hoping to encourage institutional investors to take a greater interest in the housing construction sector.”

While the Government has taken these initial steps towards addressing a lack of investment, it is still too early to say whether there has been any improvement on this front.

The Home Builders Federation highlights additional factors which are hindering the progress of house building in the UK.

HBF head of communications Steve Turner says: “The minister’s figures look accurate but there is no simple solution to house building. Mortgage availability is a factor but land is definitely another and we have been not been delivering on land through the planning system for a number of decades.

“The minister is right that we need to increase the amount of land available for development. There is a perception that more of the country is currently developed than actually is, meaning that it is only small additional percentages which are required going forwards.”

Figures from MoneySupermarket show the availability of mortgage products has started to improve since the Government’s Funding for Lending scheme was introduced in August.

The total number of mortgages available in May was 2,365. The figure had risen to 2,373 by the time the FLS was introduced. There are currently 2,781 mortgages now available, representing a 17 per cent increase since August.

But the HBF continues to campaign for relaxed planning application criteria, citing this as a significant barrier to increasing the number of homes being built in the UK.

The HBF recently made a submission to the Chancellor’s Autumn Statement in which it calls for a review of the planning application process in full.

“There is widespread industry concern about the number of planning conditions, and in particular the unrealistic and often unnecessary number of ‘pre commencement’ conditions which hold up site starts,” according to the submission.

Building Societies Association head of mortgage policy Paul Broadhead agrees that the UK has comparatively tough planning restrictions but questions whether developers are fully utilising their own existing land banks.

He says: “The house building authorities say they need looser planning restrictions but if I was the Government, I would ask home builders to develop their land banks first.”

The planning minister also warns a public desire to build “beautiful” homes is holding back contruction. He says: “In a nutshell, because we don’t build beautifully, people don’t let us build much. And because we don’t build much, we can’t afford to build beautifully.”

A policy which turns over open land to development is unlikely to be a popular one especially amoung local residents and regardless of the aesthetic outcome. What is clear is there are a number of underlying issues which require careful attention and will not be solved by one sweeping Government policy.

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