3rd March 2017

Housing is a numbers game we are not winning

Private housebuilding is the fastest growing sector in construction but major investment is needed to solve the UK housing crisis…

The long-awaited housing white paper was recently released and anyone hoping for a silver bullet remedy to the “housing crisis” was to be disappointed. I am being slightly facetious when I say that since no single remedy exists. And the government is to be commended for recognising the severity of the problem.

So given that backdrop, I was slightly underwhelmed by the solutions the paper proposed. A big problem demands ambitious solutions and this document provided very few. It seemed to tinker at the edges of the issues rather than address the central problem: there are not enough homes being built.

We have had housebuilding targets in the past, alongside regional strategies, local strategies and sub-regional strategies. But all of these have ignored one important factor – the inadequate level of housebuilding since the government ceased to take an active development role. Until that forms part of the solution, this issue will continue to persist.

For example, over the past three years, private housebuilding has been the fastest growing sector in the construction industry. The latest Barbour ABI figures show that the number of residential units awarded in January 2017 was 40% higher than in January 2016.

That kind of annual growth has existed for many months, so it suggests private housebuilders are stepping up to the plate. I am not saying they can’t be encouraged to do more and the ‘use it or lose it’ approach announced in the white paper may help improve output slightly. But will those approaches really yield an extra 70,000 homes each year? I am sceptical. As well as the absence of government intervention, it was surprising that more was not made of the supply side issues facing the sector. Boosting skills is important but allowing for any change in the flow of migrant labour after Brexit is more pressing.

I accept that to fix the broken UK housing market requires major investment and that the government does not want the next generation to “inherit our debt”. But if the next generation can’t find an affordable home in which to live, the level of national debt will be the least of their concerns.

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