Reform planning to increase access to finance
National Federation of Builders
HBA praises ResPublica for ambitious proposal to fix the housing market.
On 14 July, ResPublica published a document entitled “A national housing fund to build the homes we need”. This research proposes a radical way forward to fix the housing market, which consists of building a minimum of 40,000 new homes for rent every year by using a £100 billion Government loan over 10 years. Housing associations will be responsible for letting and maintaining the properties, while funding would be provided through Government bonds. Ownership of these properties will be split in equal parts between the Government and registered social landlords.
Besides contributing with at least 40,000 homes a year, the fund would aim to create 180,000 new construction jobs and generate £3.6 billion in tax and welfare savings. After five years, homes would be made available to buy at a fixed price pre-set on the moving-in date.
The report identifies the skills crisis, price of land and access to finance as major barriers to growth. Small and medium-sized (SME) businesses are considered as key to the delivery mechanism, with pre-purchase agreements enabling them to secure access to finance more easily. ResPublica identifies planning permissions as needing greater implementation, yet the planning process was not categorised as a primary barrier.
Access to finance is quite correctly identified as a barrier to business growth, but recent research from the National House Building Council (NHBC) revealed that fewer SMEs are reporting access to finance as the main obstacle. Instead, the planning process and associated costs continues to be the biggest hurdle to business prosperity, closely followed by the cost and availability of land.
These factors have affected housing associations, as well as SME developers, to such an extent that registered social landlords have taken on more market housing work in order to turn a profit. However, many of them continue to collaborate with SMEs because they remain experts in planning on small sites.
While the HBA agrees that access to finance is essential to boost housebuilding and supports housing associations in this endeavour. This objective will not be reached unless the planning process is radically reformed in a way that allows the entire housing market to build.
With the Housing White Paper still at consultation stage, the National Planning Policy Framework (NPPF) due for review and a myriad of complications with off-site costs still being explored, the HBA praises ResPublica for its ambition and hopes it will be extended to any future reviews of the primary barriers to housebuilding.
