Ahead of next week’s Budget, likely to be the last major fiscal event before the General Election, Pocket Living has written to the Chancellor, Rt Hon Jeremy Hunt MP (main picture), outlining what it believes are six key policy and financial ideas to arrest the decline in UK housebuilding and help more young people onto the ladder.
The move comes following the publication of the CMA report into the state of UK housebuilding, which portrays a sector in crisis and unable to meet the challenges of a growing population and tackling the UK’s productivity crisis. Pocket Living’s response also comes in the face of an SME sector facing extinction and in the context of 25% of Londoners aged 25-45 considering quitting the capital due to poor housing opportunities.
The six-point plan offers a set of ‘sensible and pragmatic’ solutions to build upon some of the initiatives already underway and set the country on a trajectory to achieving its real housing target of 500,000 new homes per year.
THE SIX POINTS
Marc Vlessing, Pocket Living
- Go further on promoting a brownfield-first agenda through the adoption of a fully permissive planning regime for small sites. This would be through a presumption in favour of development for sites of less than 0.25 hectares where threshold levels of affordable housing is provided. This according to research undertaken by Lichfields could unlock 1.6 million new homes across England without touching a square metre of greenbelt/greenfield sites. Furthermore, this initiative would not cost the Treasury a penny.
- Provide greater financial support to the SME developer sector through equity funding from Homes England to broaden the range of housebuilders and encourage the delivery of more homes. A more permissive planning regime is not in itself enough without the ability to actually build. As the CMA report makes clear, the SME sector has dwindled significantly since the 1980s, despite its importance to housing supply, leaving the 11 largest housebuilders delivering nearly 50% of all new homes.
- Implement an urgent funding package to add capacity to the construction sector and boost the number of new joiners to the industry via an intensive upskilling programme. Modern methods of construction of course have a role to play in improving delivery efficiency, but the majority of homes are still built using traditional methods and will remain so for the foreseeable future. The delivery of other major infrastructure projects has already utilised the majority of any additional capacity in the construction sector, with little remaining to build the homes we need.
- Greater tenure flexibility on new developments to encourage the provision of discount to market sale products in place of more traditional shared ownership. This could be included within a successor scheme to Help to Buy – Help to Discount Buy.
- Consider partial reform of Inheritance Tax and gifting to encourage parents and grandparents to fund deposits for their children and grandchildren to purchase their first home without fear of the tax implications.
- Consider fiscal incentives to encourage downsizing after a certain age which would free up much needed family housing (e.g. single and couple parents over 60 are significant under-occupiers of family housing throughout the UK)
Marc Vlessing, Chief Executive Officer at Pocket Living, says: “Whilst key to creating a more dynamic housing economy in the UK, the proposed measures are about more than simply increasing housing supply and supporting the housebuilding sector. On a Budget likely to be focused on growth there are significant productivity gains to be gained through the provision of housing to support key industrial and business sectors.
“We believe that, with a fairer and faster planning system and more support for SMEs we can accelerate the delivery of affordable homes, and help more people buy their first home.”
