“We’ll never build 300,000 homes a year – here’s why…”
Writing for The Neg, developer Ritchie Clapson looks at why the Government's home building target was always going to unachievable, and what he'd do to get Britain building.
House building is not keeping up with demand. But how many homes are enough?
According to the government’s English Housing Survey 2018/9, over 540,000 households reported having someone living with them who’d otherwise be homeless. And 1.6m households reported having a concealed household (i.e. an adult who wants to buy/rent on their own but can’t afford to).
The planning consultancy Lichfields made projections to determine how much house building would be needed each year to house both concealed and new organically formed households. They arrived at 389,000, significantly higher than the government’s 300,000 target.
Not enough
Over the last twenty years, we’ve averaged less than 190,000 new homes per year, and the largest number we managed was 243,000 in 2019/20. So even a step up to 300,000 would mean building over 20% more than in our best recent year’s production.
Dormant
Countryside charity CPRE’s State of Brownfield 2022 report suggests that brownfield land for up to 1.2m new homes is currently lying dormant in England.
The significant advantage of brownfield projects is that they will be connected to existing infrastructure.
And from a political perspective recycling empty buildings is usually a vote-winner – after all, who wants a derelict factory on their doorstep, or a dead high street filled with empty shops?
But most brownfield land is in the form of relatively small buildings and plots that don’t appeal to the larger home builders. Instead, it falls to the smaller SME developers to take on these projects, and luckily, small-scale property development is currently enjoying a resurgence.
Many first-time developers entering the market including existing landlords who’ve woken up to the fact that the buy-to-let market is a shadow of its former self and that doing something as simple as putting flats above a shop can unlock six-figure profits.
The government has helped by creating increased permitted development rights, making it easier than ever to convert these buildings. But SME developers only account for 12% of the country’s housebuilding, down from 30% in their heyday.
Complexity
The target of 300,000 new homes per year looks light. The complexity of the issue requires a nuanced approach to meet targets, address public sentiment, and leverage alternative solutions, such as brownfield redevelopment.
Local and national government need to do even more to ensure that first-time property developers can take advantage of the opportunities that brownfield represents.
Author bio
Ritchie Clapson CEng MIStructE is a veteran property developer of 40-plus years, an author, industry commentator, and co-founder of the leading property development training company propertyCEO.
