The latest DCLG housebuilding statistics should be a wake-up call for the politicians who at their party conferences made bold claims of delivering at least 200,000 homes a year.
The reality is we are nowhere near doing so.
In the three months to September 31,130 homes were completed in England. While this was the highest quarterly total since early 2012, it only puts us on track for an annual total of around 120,000 homes. Furthermore, the number of home starts fell by 10 per cent compared to the previous quarter.
There are many reasons for our chronic undersupply of housing but the most significant is the government isn’t pulling its weight. Building more than 200,000 homes a year is achievable – we did it every single year of the 1970s – but the target will remain fantasy without the public sector playing a vastly bigger role.
That was the case 10 years ago when the Barker Review looked into housing supply, and remains so now, as our recent report A Decade On, concluded. The government must get its hands dirty in everything from land assembly and infrastructure provision to planning and procurement. Setting targets in isolation simply repeats previous failures.
“Setting targets in isolation simply repeats previous failures”
Firstly, there is an overdue need for a comprehensive plan looking at the implications of housing targets for both public and private investment, the level of mortgage funding required, the capacity of the housebuilding sector and its supply chain.
No government over the past 30 years has produced such a plan.
More than anything, though, the government needs to start building. The private sector has delivered a stable supply over the years. What’s missing compared to the 1960s and 1970s, and is responsible for the continued shortage, is public sector investment.
Historically, when we’ve delivered 200,000 homes, the public sector has built half of them. Compare that to the last quarter when local government accounted for just 440 of 33,000 homes started.
Housing is an asset that appreciates in value and the government needs to think like a property developer. By capitalising on its ability to borrow cheaply, the government can get new homes built at low cost. Once new homes are built, it can sell these assets to individuals or investors, freeing up resources for investment in building new homes. Against a backdrop of local and central government cuts, this approach would generate valuable public sector revenue.
Until the public sector actually starts building, we will not deliver the homes that are needed and we will continue to suffer the economic and social consequences of failing to do so.
Jonathan Stickells is DTZ’s head of residential sector.