With the release of an industry report forecasting a one million homes shortfall by the end of 2010, Sue Warwick, national sales and marketing director for Miller Homes, looks at the issues raised within the report and what the Government could do to help house builders like them to the meet the challenges that lie ahead.
“It is very encouraging to see that key issues have been raised by the ‘Mind the Gap’ report as Miller Homes, along with our fellow industry experts have been raising the concerns outlined in the report throughout 2009. We hope that now these issues have been highlighted in this manner, the Government will see fit to take heed.
“The house building industry has constantly been tasked with providing more housing – even in 2006/7, when the industry was booming, 168,000 units were deemed inadequate for meeting demand. With this in mind, it isn’t at all surprising to the industry that a one million homes shortfall is on the cards after the most damaging economic period in decades. Compound this with the difficulties faced with land supply and increased scrutiny over consumer lending by banks, developers are stuck between a rock and a hard place.
“There is no doubt that consumer hunger for new homes is high – our footfall and sales rates have both improved throughout this year, signalling that buyers are exploring their options and making purchases once again. However, for house builders to respond and fulfil the needs of an ever-growing population, certain measures need to be taken, although this process will not happen overnight.
“The Government needs to support consumers by ensuring that banks provide higher loan to value mortgages at affordable rates. Existing incentives such as HomeBuy Direct have gone some way to helping free up consumer cash, but banks need to do more to help.
“The grass roots issue of land supply needs to be tackled to free up the appropriate space to bring new developments to fruition and meet demand. Developers have significantly reduced their land acquisitions and land owners have been reluctant to sell in what has been a depressed market.
“The report mentions the measure that the HCA has introduced in the form of the Kick Start funding programme to help ‘reactivate’ stalled sites. The first phase of the Kick Start scheme is almost complete and the next round is ongoing, proving that initiatives like this are a positive step and have been very well received. But this help cannot stop here, there must be more.
“The Government must help cushion land sellers and buyers and restart a productive land supply process which benefits all stakeholders and helps achieve the key goal of providing more quality homes for the population.
“The changing needs of the population need to be taken into consideration too. The demand for larger family homes is growing, along with the need to cater for single parent family units. This changing demographic challenges the way that house builders address the design of homes to ensure that their needs are met.
“The report also addresses some serious flaws in the planning process, which, in my opinion, need to be addressed in order to simplify and speed up the process. A change in Government could spark major reforms that could cause further complications to this already over-complicated system. In order for developers to move swiftly to supply the demand required, it is imperative that the planning process is a supportive vehicle to ensure high quality housing is produced within shorter timescales.
“For a co-ordinated recovery of the market, each link in the house building chain needs to be addressed, assisted and nurtured, in order to move the market forward so that developers like us can really get stuck into solving the housing shortfall issue head on.”