Government's pledge to build 300,000 homes per year falling further out of reach
The need for more affordable housing in the UK is a prevalent issue, with demand superseding supply in recent decades.
During the back end of 2022, housing secretary Michael Gove announced what was seen by many as a watered down amendment that will result in ‘advisory’ rather than ‘mandatory’ housebuilding targets, effectively putting an end to the government’s pledge to build 300,000 homes a year.
This decision was met with dismay by many experts within the industry who stressed that the result would lead to fewer new builds, further exasperating the housing crisis.
New builds – the need for more homes
David Hollingworth (pictured left), associate director of communications at L&C Mortgages, said the need for more houses to be built is clear. He added that target numbers have risen for as long as he can remember, without ever seeming to get close to the point where they can be achieved.
“So, the argument is not about whether there is a need for more homes to be built or whether there should be a target to help deliver the supply of more affordable homes, but more about how that will be best delivered,” he said.
On the face of it, Hollingworth said making a target advisory, rather than mandatory, looks to only open the door to targets being missed. There is a lot of political play at work of course, but he believes the main argument against the amendment would be that advisory targets may result in a number of unintended consequences.
“These consequences, for example, could stem from poorly delivered housing or alternatively nimbyism for communities to prevent new development,” Hollingworth added.
He believes that watering down local targets will only make it harder to reach the 300,000 target, and risk the supply of property remaining lower than it needs to be to help boost the availability of affordable property.
However, he said that if the advisory target helps to bring better flexibility and allows local authorities to decide how to best deliver the right type of homes in the right place, then it may avoid poorly conceived development.
Benefits of new builds
With the cost-of-living crisis continuing to impact homeowners across the country, Lyn Webb (pictured right), director of Mortgage Saving Experts, said new builds remain highly desirable.
“New build homes have a higher price tag than older houses, but with cheaper energy bills and less maintenance, they may be cheaper in the long run,” she said.
Webb also said that additional benefits of new build homes include being chain free, as well as more safety and security features than older homes.
She believes that with buyer confidence beginning to return, the desirability from customers to purchase new build properties will grow, however Webb added that it will come down to whether there is enough supply to meet the demand.
New builds – has stability returned?
While there is a concern the government’s amendment may result in the declining production of new build homes, Webb said this year could bring more stability to the UK housing market after a bumper year in 2021 when house prices were pushed to record highs.
With signs of stability slowly returning, Webb said increased demand may force the government’s hand and push them to construct more new build properties, or to encourage local authorities to do so.
Webb added that she expects the trend of people moving out of cities as a result of more flexible working conditions to continue in 2023, further impacting the need for more newly built homes on the outskirts of locations with major infrastructure.
