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Housing supply becomes government priority

Two government announcements on housing this week demonstrated the priority being placed on increasing supply – and the drivers behind it.

Launching its Affordable Housing prospectus, the government was keen to stress how the 165,000 homes it will deliver will create 165,000 construction jobs.

We actually think the multiples are 1.5 jobs per house built, meaning the creation of nearly a quarter or a million direct construction jobs. However, either way, the numbers are significant.

“Such a level of private sector investment is reliant on an improving economy and a level of certainty”

When you then factor in the indirect jobs housebuilding creates in the supply chain – materials, white goods, curtain, carpet manufacturers etc – with a still fragile, if recovering economy, the attractiveness for government of delivering much-needed affordable housing is clear.

Indeed, housing supply generally is clearly seen as a priority. The Help to Buy equity loan scheme for new-build homes is driving supply, while further changes to the planning system are proposed to ensure enough land is coming through to meet the country’s housing needs.

The affordable housing announcement set out a £23bn spending programme – a large chunk of which is private money from housing associations and housebuilders large and small.

Red tape drive shows direction of travel

Such a level of private sector investment is reliant on an improving economy and a level of certainty, such that business leaders can plan ahead.

This thus links closely to the other announcement we saw this week from the prime minister on cutting red tape and bureaucracy.

There didn’t actually seem to be anything new in what the prime minister said as far housebuilding is concerned – we expect a response from government shortly on the Housing Standards consultation that will set out measures that impact us.

But the direction of travel on this more generally from government is clear.

“The costs of implementing the plethora of regulations has a big impact on site viability and thus housing delivery”

Housebuilding is a hugely regulated industry and the costs of implementing the plethora of regulations has a big impact on site viability and thus housing delivery.

It is a problem across the board but small builders in particular struggle to afford and adhere to the requirements, while organisations looking to apply through the Affordable Housing prospectus need to know what standards they will be required to build to if they are to make accurate submissions, and they can deliver more if unnecessary regulation is cut back.

As the government looks to increase housing supply and reap the economic benefits, we need to see a sensible and practical resolution to the Standards Review that reduces unnecessary bureaucracy and gives us all a clear set of effective standards to work to.

Stewart Baseley is the executive chairman of the Home Builders Federation

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