A lack of mortgage availability on affordable terms for potential homeowners without a 20 per cent deposit is the main short-term restraint. The welcome £250 million FirstBuy allocation demonstrated that the government has realised the economic benefits and social need to increase housebuilding.
First-time buyers have dropped from 600,000 a year a decade ago to barely 200,000 last year. Lenders seem aware of the issues, with products being introduced such as Lloyds’ Lend a Hand scheme. While generally not available on new homes, I am hopeful this will change.
A tougher national and international regulatory regime is likely to act as a permanent restraint on lending for house purchases. The FSA’s Mortgage Market Review conclusions, due in the autumn, are key to this.
A shortage of land with planning permission viable to develop remains a longer-term constraint and the National Planning Policy Framework and Localism Bill will be vital in this debate. The NPPF is a balanced document allowing local authorities to manage development, and is clear that it won’t build up on the green belt. The government must hold its nerve and not allow pressure from anti-growth groups to produce a watered-down final version.
We have a crucial 12 months ahead for housebuilders and the country’s ability to deliver housing in the future. Housing output will rise if we see progress on mortgages, planning and regulation reduction.
Stewart Baseley, Executive Chairman of The Home Builders Federation