The government’s decision to make the housing sector a central focus in the King’s Speech was welcomed by industry professionals, but there is a big task ahead.
At the opening of Parliament today, King Charles revealed the government’s plan to “get Britain building” and reform the planning system to deliver more housing.
Melanie Spencer, sales and growth lead at Target Group, said it was not surprising to see housebuilding play a central part in the speech.
However, she said successive governments had “limited success” in housing delivery targets and questioned whether changes to planning rules would do enough to resolve this.
Spencer added: “Even so, with any growth in supply, there is the potential for greater pressure on the already complex house buying process.
“As an industry, it’s important we continue to play our part to transform the home buying experience, providing lenders and borrowers with all the necessary tools and innovations to support faster decision-making and access to wider product choice to make this process as seamless as possible for all parties.”
Solving housing crisis not a numbers game
Maria Harris, chair of the Open Property Data Association (OPDA), agreed, saying she was “delighted” to see the Digital Information and Smart Data Bill included in the announcements.
“Solving the housing crisis is not just a housing numbers game,” Harris said.
She continued: “Our chronically poor and sclerotic home buying process contributes significantly to the crisis by blocking homemoves and engendering low consumer confidence.
“We look forward to seeing the government’s plans to take ownership of an urgent overhaul of the process, ensuring property data is digitised at source and that transactions are underpinned by a digital ecosystem.”
More could be done
Others wanted to see more from the government, such as Simon Webb, managing director of capital markets and LiveMore, who said it was “disheartening” to see there was no extension of the stamp duty exemption for all buyers.
He added: “This omission continues to place unnecessary financial burdens on those looking to move.
“The government needs to take decisive action and revamp the current process to ease the pressure on older homeowners who are keen to downsize but find themselves stuck due to prohibitive costs.
“An urgent overhaul could significantly benefit these individuals and help release larger homes back into the market, thus providing a more balanced and efficient housing solution for everyone.”
Mobeen Akram, new homes director at Mortgage Advice Bureau (MAB), said the focus on planning was a “positive development”, but the government had “an uphill climb ahead of them”.
She said: “To reach that all-important 1.5 million homes target, we need to get off on the right foot. By pushing the need for collaboration between the government, lenders and housebuilders, we may start to see some progress.
“Whether it’s mandatory housebuilding targets, investing in local authorities, increasing product innovation or additional support for first-time buyers, we all have our part to play in driving growth across our sector.”
Developers cannot ramp up building overnight
The government’s intention to reform the planning system was also welcomed, but the industry said developers and housebuilders needed an economic push.
Jatin Ondhia, co-founder and CEO of Shojin Property Partners, said: “Now we need concrete and robust plans to meet housebuilding targets. Rhetoric alone won’t suffice – Housing Minister Matthew Pennycook has a long ‘to-do list’, and he must support the construction sector by mobilising the financial resources needed to realise these plans.”
David Hannah, group chair of Cornerstone Tax, said there were “several important elements that are yet to be addressed.”
He said the plans had been labelled a “war on NIMBYs” and the decision to cut red tapes “made for good soundbites, but we have little clarity as to what this means in practice”.
Hannah asked: “Will Labour ignore the concerns of local residents in favour of the ‘greater good’? It remains to be seen.”
He went on to say there was a “developer-shaped elephant in the room”, as private builders had been “plagued with high interest rates and an ever-increasing tax burden” in recent years.
Hannah added: “Developers cannot simply ramp up their output overnight; the new government must create new incentives for the sector, and punitive housing targets are not the way to go.
“Private developers ought to be offered a tax break for the vital services that they provide, encouraging new entrants to the market whilst also stimulating further economic growth.”
Ryan Etchells, chief commercial officer at Together, said there needed to be real action.
“The success of this policy rests on utilising the UK’s ‘grey belt’ although, as of yet, we don’t have a definition of what, where or how much of this exists,” Etchells said.
He continued: “Our current system is broken, with too much power at local council level, which simply doesn’t have the specialist skills needed to be effective. Until the government delivers on its promises, many builders will be hampered in planning loops, making them unable to deliver on their commitment to build new houses.
“This needs to be top of the agenda for the new government to get property investment moving and deliver the housing stock the UK needs. Buying and developing property is a big undertaking for many, and this will only happen if the underlying economy provides the confidence needed for this kind of long-term planning.”
Matthew Tucker, senior associate at UK law firm Burges Salmon, said the proposal to reform compulsory purchase order (CPO) rules to make sure compensation paid was “fair” and “not excessive” had the ability to improve the financial viability of larger projects.
He said this could “make it easier for local authorities – or other acquiring authorities – to bring forward comprehensive planning proposals.”
Tucker said there was “an inherent tension” between the centralisation and imposition of “top-down” targets, so the government’s commitment to fund local authority capacity would be “critically important”.
Mariya Rankin, senior associate of Eversheds Sutherland LLP, said the ability to build at speed did not only depend on easing planning restrictions.
She added: “As well as the need for more resources for planning departments, there is a growing tension between innovation in building sustainability and reusing construction materials, and the industry’s tendency to opt for tried and tested ‘standard’ materials that are certified to comply with safety legislation, but are in short supply, at a high price or simply no longer the most sustainable option.
“Legally, converting construction demolition waste [CDW] into a product involves lengthy testing obligations and unclear regulations, which can price small-scale innovators out of the market and ultimately slow down the construction process. The current CDW regulations are just one contender for reform to smooth the path to building affordable, sustainable homes for the future.”
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
