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PROPTECH-X ‘Proptech & Property News’: Slump in house building set to get even worse | Holiday let proposals risk locking in recent growth

NAPB: Slump in house building set to get even worse

PRESS RELEASE: The slump in house-building is set to get even worse, a leading property group has warned. New figures released earlier this month indicated the number of homes being constructed had tumbled to the lowest level since the pandemic. 

And the National Association of Property Buyers fear things will fall even further in the weeks and months ahead. Spokesman Jonathan Rolande said: “If the task of building homes for the population is left to private companies, we can expect things to get worse. As the market tightens, thanks to the increases in both short and long-term borrowing costs, property developers are resisting the urge to build, because many are worried that they will be left holding unsold property.

“We have already seen a slowdown in purchases of new-build which has been exacerbated by the end of Help2Buy, adverse publicity surrounding build quality, safety and leases, and the buy to let market contracting.”

Mr Rolande said there were a number of reasons why we need to see an urgent rise in building.

He said: “Building more homes will help to relieve pressure on prices and rents that will continue their upward trend if supply isn’t increased. A lack of housing impacts on health, well-being and prospects and leads to a greater inequality of wealth between the haves and have nots, the old and the young.”

Suggesting how the situation might be reversed, he continued: “House builders need to be incentivised to build and sell even if that dents their margins. A levy on banked land would be a good start. Another positive step would be speeding up the planning process which is often discussed but notoriously tricky to do.

“It’s no surprise that existing residents don’t want to see development in their area with the extra crowding, road use and pressure on resources like schools and doctors that it brings. But investment into the planning system could speed the process up .

“Councils could also borrow to build social housing – this can often be done on redundant land that they already own, cutting the cost and putting valuable space back to good use. More housing in some of the desolate parts of our town centres brings new customers to the area, boosting the local economy.

 “Finally, council Tax for unoccupied property could be inflated to discourage leaving a new build empty, waiting for a higher price. The same could apply to unlet office space, much of which could be redeveloped to provide homes.

 According to data released last week the number of homes being built tumbled last month at the fastest rate since the early days of the pandemic.

The slump has been blamed on high interest rates pushing up borrowing costs for developers and their potential buyers – and a slowdown in new projects.

The dire figures come weeks after a report indicated house building in England is due to fall to its lowest level since the Second World War, according to an analysis by the Home Builders Federation (HBF), owing to a range of government policies that threaten to dramatically slow development.

The study says the supply of new housing is likely to fall below 120,000 homes annually over the coming years, less than half of the government’s target, as a result of changes to planning policy and what developers say is over-strict enforcement of environmental regulations. This would represent the lowest level in more than 80 years. 

Holiday let proposals risk locking in recent growth

PRESS RELEASE: Commenting on today’s publication of proposals to regulate the holiday let sector using planning rules, Dan Wilson Craw, Acting Director, Generation Rent, said:

“The growth of holiday lets has reduced the availability of homes for locals in areas with large tourist economies. The government has rightly recognised that the sector needs regulating. A register of tourist accommodation is essential but these planning proposals will not reverse the recent trend. 

“Under the government’s plans, existing holiday lets – including homes that tenants were evicted from to make way for tourists – would get automatic planning permission. And few landlords would apply to revert their property to residential use: because it is more lucrative to rent to tourists than to tenants, properties with planning permission for holiday lets will suddenly become more valuable than regular houses. 

“The planning proposals might help ensure that future homes built in holiday hotspots are lived in by locals, but compared with the rapid loss of homes in recent years, it will take a long time to restore balance to the rental market, and people will continue to be priced out of the areas they grew up in.

“To avoid locking in the recent loss of homes, and push houses back into the residential market, the government should give councils powers to require holiday lets to have licences. Licences would expire after a set period, and councils with severe housing shortages could place caps on how many could be issued and renewed.” 

Proptech and Property News in association with Estate Agent Networking.

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Andrew Stanton Founder & Editor of 'PROPTECH-X' where his insights, connections, analysis and commentary on proptech and real estate are based on writing 1.3M words annually. Plus meeting 1,000 Proptech founders, critiquing 400 decks and having had 130 clients as CEO of 'PROPTECH-PR', a consultancy for Proptech founders seeking growth and exit strategies. He also acts as an advisory for major global real estate companies on sales, acquisitions, market positioning & operations. With 100K followers & readers, he is the 'Proptech Realestate Influencer.'