By Richard Hook and Emanuela Barbiologio
Most housebuilders sceptical about long-term supply levels
The supply of new housing hit the 200,000 mark in England in the year to April 2017 – but the majority of respondents to Knight Frank’s annual housebuilder survey do not believe supply can be maintained at this level in the long term without changes to housing policy.
Only 35% of respondents believe that growing housing numbers by more than 200,000 each year is achievable. Given that an estimated 250,000 new homes are needed every year to keep pace with population growth, this suggests that housebuilders will continue to fail to build enough homes.
The survey, which gathered the views of 70 respondents from companies responsible for more than three-quarters of all housebuilding, reveals widespread frustration with current housing policy and proposed reforms.
Four out of five say that the housing white paper does not go far enough to address the problems in the housing market. One of the most common complaints is that the policy document lacks detail.
The majority of housebuilders – particularly smaller firms – also believe the planning system needs to be simplified. Some 71% of all respondents say the planning system is having a negative impact on supply, rising to 88% of medium-sized firms.
“The policy environment is uncertain at present, but housing needs to remain a top priority,” says Justin Gaze, joint head of residential development at Knight Frank.
“A simplification of the planning system has to be a goal. This would reduce costs and help housebuilders, especially SMEs, to build more housing.”
Although most respondents do not believe new supply can be sustained above 200,000 in the long term, the majority are optimistic that the delivery of homes will continue to rise over the coming year.
This increase in output could take new housing delivery beyond the 200,000 mark and back towards the highs experienced in the run-up to the financial crisis.
However, SMEs are notably more pessimistic, with only 40% expecting to build more homes in the coming year.
