Will the government deliver on its housing targets?
The UK is widely considered to be in the grip of an acute housing crisis. Numerous commentators have highlighted the lack of affordable properties as a key contributor to this problem and, unsurprisingly, the issue was a major focus in the build-up to the general election.
Following its victory at the polls, David Cameron's Conservative Party must now focus on fulfilling its pledge of delivering 200,000 new-starter homes, which will be sold at a discounted rate to first-time buyers under the age of 40.
However, achieving this target may not be an easy feat. In April, Knight Frank conducted a survey of housebuilders that found more than two-thirds believe current market conditions mean it will be impossible to build more than 180,000 new properties annually. Just nine per cent claimed the 200,000 target is achievable at present.
The businesses highlighted a number of issues that need to be overcome if housebuilding levels are to be boosted. Some 82 per cent pointed to the need for additional resources in local authority planning departments, while 58 per cent want the construction industry to have access to better training and 57 per cent believe it should be easier to build on public land. Other obstacles include the rules around development on green belt land, environmental requirements and access to development funding.
Build it and they will come '
It is clear then that government may have to make some changes if it is to fulfil its pledge. However, will people actually want to live in the new properties it creates? This week has seen the release of a study conducted by the HomeOwners Alliance and BLP Insurance, which revealed many people are unconvinced by new-build properties.
Only 21 per cent of the people surveyed said a new-build would be their ideal property of choice, with twice as many saying they would prefer an older home. A lack of faith in modern construction standards was one of the main reasons behind this uncertainty, as well as a feeling that new homes lack character or distinctive features, are smaller, have a shortage of green space and a limited sense of community.
This survey provides some interesting insights for letting and estate agents about what people value in a home and suggest older properties will be far more attractive to the majority of househunters.
What might the government's housebuilding targets mean for the private rented sector? Should it deliver an increased supply of affordable homes, it is possible the number of people looking to rent may fall as homeownership becomes more of an attainable goal. However, the cultural shift towards renting is likely to continue and the government is aiming to boost supply in the sector through its Build to Rent Fund. Indeed, three multi-million pound deals have recently been announced that will see more than 1,000 rent-specific homes built across London.
Whether the government will be able to deliver on its housebuilding targets remains to be seen, but, whatever the outcome, both the lettings and estate agency sectors are set to be directly affected.