Local councils fall for six years behind their home construction goals

Local councils have fallen behind their home-building goals for over six years, while Britain continues to struggle to tackle the housing crisis, research has revealed.

After slashing the advice figures, the modular house contractor, Project Etopia, noted that development across the UK is moving at such a glacial pace that 316 sites will not have met the 889,803 housing targets over the next eight years.

This is a government report by Sir Oliver Letwin who concluded that house builders are deliberately building slowly so as not to lower house prices.

Housing construction in 316 municipal areas is set to fail by 889,803 homes in the next decade

Housing construction in 316 municipal areas is set to fail by 889,803 homes in the next decade

Housing construction in 316 municipal areas is set to fail by 889,803 homes in the next decade

Last September, the Ministry of Housing, Communities and Local Government set annual housing targets with local authorities, who informed the government's new national policy framework in July.

Just one year after the publication of the report, 241 of the 316 localities are already in deficit, leaving them on average 9.2 years behind the target.

And of the 10 councils that were left behind, it would take until 2060 to build all the necessary houses by 2026, according to the calculations of the Etopia Project.

What municipal councils are doing the worst?

The figures show that Southend-on-Sea is by far the worst city outside of London to achieve its goals, and it is anticipated that 8405 homes will short of what it needs by the end of 2026.

If it does not accelerate, it will take another 34 years to build enough homes.

The goal of the government of 300,000 homes per year by 2020 will be achieved?

Probably the short answer is not – the goals are far from being met in any way you measure them.

In the 2016/17 financial year, 217,350 new construction houses were completed, very far from the government's goal of 300,000 homes in the year by 2020.

The figures provided by the NHBC guarantee provider show that this year 106,031 new construction houses have been completed by members of NHBC, representing approximately 80% of the market.

Factoring a further 20% would bring the total figure to around 132,500 so far for this calendar year, excluding conversions of non-residential real estate.

The government's financial year runs from April to March, and although it's too early to say how much, it's safe to say that the 300,000 goal will not be achieved.

Steve Wood, managing director of the NHBC said: "300,000 are obviously very far away and it is a challenging target.

"There is no silver bullet, but it is necessary to make some changes to the way the industry works to get there".

Councilor James Courtenay, deputy head of the Southend-on-Sea Council, said: "In July this year, the revised picture of the government's national planning policy has re-evaluated the housing needs of our area using a new formula.

"We are now preparing new plans to see how and what percentage of this need can be sustainably delivered to Southend.

"Given that we are only three months after the publication of the new NPPF, it is too early to make any significant predictions about what will or will not be delivered through our new local plan."

Although the revised NPPF only came in July, it was informed by the report published in September last year that illustrated in detail the number of new homes that the country needs to build in every city and city.

Joseph Daniels, CEO of Project Etopia, said: "Our research shows that councils have a lot to do if they want to achieve almost these goals".

York and Luton are the only other cities and cities more than 20 years late. All ten councils with the biggest deficits are on average two decades from the pace.

The Project Etopia study also found tips with fewer homes to build, such as Gosport in Hampshire, which only needs to build 238 years, have struggled to achieve their goals. Gosport is 17 years late.

Why are the councils so far behind?

For years, councils have prevented the construction of new housing, leaving them at the mercy of builders whose construction rates may be hindered by economic and planning constraints.

However, the prime minister announced at the Conservatives Conference at the start of this year that the borrowed roof would be lifted to encourage local authorities to commission and finance new developments.

Daniels said: "It is alarming to see so many areas back so far already.If the pace is not quickly reached, we will be in an even deeper black hole in 10 years of what we are now.

"The need for accommodation is clear to everyone, but not enough is done." It is a touch of satisfaction – everyone knows that it is necessary to build more houses and quickly, but not enough decisive initiatives are being taken to alleviate the crisis ".

Where the NHBC completions have been registered so far in 2018, which represent 80% of the market

Where the NHBC completions have been registered so far in 2018, which represent 80% of the market

Where the NHBC completions have been registered so far in 2018, which represent 80% of the market

Why do houses take so long to build?

On the same day of the Report, last month, Sir Oliver Letwin's one-year review of the construction of new homes was published in its final form.

Letwin has not discovered that big house builders cling to the land until its maximum value is achieved, a practice known as "land banking" for which they have been widely criticized.

Top 10 cities and towns behind to meet their home construction goals
Council Target 2016 – 2026 Annual construction rate 2026 defecit How old are there?
Southend-on-Sea 1,114 250.6 8,405 33.5
York 1,070 302 7604 25.2
Luton 1,417 430 9502 22.1
Oxford 746 249.4 4895.4 19.6
Tunbridge Wells 692 241.6 4285.6 17.7
Gosport 238 83 1,472 17.7
Worthing 865 319 5,436 17.1
Braintree 835 316 5,211 16.5
Guilford 789 290 4,777 16.5
Sevenoaks 698 263 4,285 16.3
Source: Etopia project

Instead, he found that developers buy land based on existing local property values ​​and build at a pace that does not flood the market – basically building up slowly enough to keep house prices where they are already.

The review examined the time it took for developers to approve planning until the completion of the last house on 15 large sites in areas of high demand and found an average of 15.5 years.

The review also found that only 6.5% of the total number of planned homes was built each year.

Letwin's report says: "Once a house builder working on a large site has paid a price for the land that is based on the assumption that the sale value of new homes will be close to the current value of second-hand homes. in the locality, the house construction company is not inclined to build more houses of a given type in a given year on that site than it can be sold by the company at that value. "

In short, this translates into: building slowly enough that house prices do not fall.

Letwin concluded: "It would not be sensible to try to solve the problem of market absorption rates by forcing major home builders to reduce the prices at which their current products are sold.

"This would, in my view, be very serious problems not only for big house builders, but also, potentially, for prices and financing in the real estate market, and therefore for the economy as a whole".

Types of housing built in Britain since 1946 - Office for National Statistics

Types of housing built in Britain since 1946 - Office for National Statistics

Types of housing built in Britain since 1946 – Office for National Statistics

Instead, he found that requiring home builders to build a mix of homes, including a high proportion of affordable housing, would keep current house prices and still allow houses to be built more quickly.

Letwin did not offer any suggestions on how to deal with the economic barrier for buyers, as the relationship focused exclusively on how to bring more houses to the market faster.

Instead, he suggested providing incentives to developers to build cheaper homes and give councils additional powers to buy land for development cheaper.

To bring into perspective the scope of the UK housing shortage, since 1970 France has built about twice as many new homes each year in Britain and experienced half of the growth in real estate prices.

Studies by the Office for National Statistics suggest that between 1997 and 2016, average annual earnings have increased by only 68%, while house prices have skyrocketed by 259%.

Thirty years ago, full-time employees in England and Wales could typically expect to spend 3.6 times their annual earnings on the purchase of a home, according to data from the ONS.

Today, homebuyers can expect to spend 9.7 times annual earnings on the purchase of a newly built property and 7.6 times their annual gains on an existing property.

Source: Open Property Group

Source: Open Property Group

Source: Open Property Group

The search for the Open Property Group suggests that property prices should decline by an average of 36 percent to £ 125,329 so that having an affordable home for one person can earn an average salary.

The CEO of Open Property Group, Jason Harris-Cohen, said: "The homeowner peaked in the UK in 2007. These figures show how far from the scope of the right of way enjoyed by the baby generation boom for both the millennials.

"Of course, if there is a better offer of available properties, prices could become more accessible as developers and home sellers compete to make their properties more salable".

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