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Local housing restrictions are a fundamental challenge to overcome

At the end of a week full of predictions and possible reforms, we now have a clear view of how the government intends to stimulate and steer the housing market.

Housing came high on the agenda in George Osborne’s final Autumn Statement before the election.

The flagship reform was of course the vote winning revision to stamp duty, which obviously provides welcome support for many homebuyers and should act as a welcome stimulus to the market.

That aside, it’s important to recognise that behind that high profile gesture, other reforms are likely to have as much if not more impact on the sector. 

Direct commissioning and the rhetoric around it provided an interesting insight into the challenges that public sector face in contributing to an increase in housing supply.

Over and above the short-term damage caused by the recession, the fundamental gap in supply over the last 25 years has largely been as a result of the financial barriers and restrictions placed on local authorities and other public bodies, resulting in public sector housing production collapsing.

It could be argued that as well as investing in direct commissioning, the government should have sought to remove the cap on local authority housing receipts in order to stimulate a new wave of local authority mixed tenure housing development. 

We have seen in the last 18 months how gradually raising the borrowing cap has already started to bear fruit. 

With that in mind, we have been working with several major authorities helping them build their first council housing in over 20 years so the appetite is there.

We all know how the private sector housing market is cyclical, so direct commissioning certainly does have the potential to provide a more reliable supply during the peaks and troughs and the consultation on how to speed up the planning process should help.

The release of underused public land over the next five years, with a capacity to provide a further 150,000 new homes, will also play a part but we all must appreciate the supply chain and labour challenges such an acceleration in production will create.

Kier Living combines the granular skills of contract house building with the “value add” retail ability of mixed tenure and private housing so is well placed to play a valuable role in increasing UK housing production.

This thinking could well be for nothing after the election in May 15 however we can draw comfort from the fact that there is all-party support to at least double housing production and that housing should be seen as a critical infrastructure requirement rather than a “nice to have”.

John Anderson is executive director of Kier Living

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