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Housing Futures Housing Supply

Housing Futures Housing Supply

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Housing Futures Housing Supply

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  1. Housing FuturesHousing Supply John Stewart HBF Director of Economic Affairs 17 July 2007

  2. Housing FuturesHousing Supply 1. Plan-led System 2. Housing Land Supply 3. Housing Target 4. What is to be done?

  3. 1. Plan-led System

  4. 1. Plan-led System Housing under-supply inevitable in plan-led system in market economy • Politics • Site drop outs • Windfalls/brownfield

  5. 2. Housing Land Supply

  6. ‘Delivery’ Market Based Housing ‘delivery’ depends on: • Land market – competitive price setting • Developer profitability (margin, ROCE) • Housing market – developers price takers • Supplemented by social house building (but >50% ‘Affordable Housing’ via S106)

  7. Sources of Increased ‘Delivery’ Three components of ‘net additions’: • New homes (~90%) More land with planning permission and/or Higher densities • More conversions • Net of demolitions

  8. Land Banking • House builder land banking – a myth, beyond operational requirements (Barker’s conclusion) • Large stock of outstanding permissions?

  9. Land Banking HBF survey of 21 large house builders 5.1 years land in pipeline, of which: • 47% (2.4 years) implementable permission (of which 97% started within 3 months) • 36% allocated or outline consent • 17% not allocated & no consent

  10. 3. Housing Target

  11. Housing Target: England • 240,000 net additions per year by 2016 • 3 million additional homes by 2020 • New homes: quality, zero-carbon by 2016 Household growth: 223,000 pa 2004-26

  12. Assumes: 185,000 net additions in 2007, 240,000 in 2016, 3 million by 2020, 25,000 pa conversions-demolitions

  13. 4. What is to be done?

  14. What is to be done? Step-change in implementable residential planning permissions • 160,000 @ 40 per ha => 4000 ha • 215,000 @ 40 per ha => 5375 ha (+34%) • 215,000 @ 35 per ha => 6143 ha (+54%) • 215,000 @ 30 per ha => 7167 ha (+79%) Assumes: constant average site size; 25,000 pa conversions less demolitions

  15. Central Government • Policy, guidance, systems adequate • Monitor system and outcomes • Enforce/intervene – e.g. curb LA “interpretation”& avoidance of proper process • Adequate infrastructure funding & delivery • Communities England role? • Let markets work!

  16. Regional Government • Set adequate RSS housing targets • Increase targets to hit 240,000 pa – early priority • Cascade adequate targets down to LAs Regional Assembly role to be curbed? RDA role to be increased, RES driving?

  17. Local Authorities • Accelerate LDD preparation • Set key policies in LDDs, not SPDs • SHLAAs* critical to delivery • Realistic brownfield and greenfield assumptions • Curb excessive cost demands on land values • Want to make it happen! *Strategic Housing Land Availability Assessments

  18. Industry House building, supply, energy, finance industries: • Skills and training • Construction methods, innovation, delivery chain • Materials and products (incl. Zero Carbon) • Local renewable energy provision • Finance • House building industry capacity expand • New home quality (design, product, satisfaction)

  19. Housing FuturesHousing Supply John Stewart HBF Director of Economic Affairs 17 July 2007