Is the supply of homes being constrained?
On 27 June, CPC hosted its third consecutive client lunch in conjunction with this year’s Chartered Institute of Housing conference in Manchester. It was our biggest and best yet with over 70 housing professionals from across the North of England.
There was a positive outlook at the lunch around the industry’s ongoing commitment and will to make a step change in people’s lives by boosting housing accommodation across the UK. Better collaboration between housing providers and more engagement with investors and suppliers will help to unlock the potential of housing schemes and support he Government’s policy to increase the number of new homes to 300,000 per year up to the mid 2020s.
We are playing our part in this drive to deliver more, and have secured new relationships with The Guinness Trust, Vivid Homes, Sanctuary Housing, Derbyshire Developments, the University of Oxford and Hampshire Trust Bank that will see us supporting the delivery of all types of housing including social and affordable housing and student accommodation.
The housing market faces considerable challenges in the year ahead, not least, in the Care and Extra Care homes sector with an ageing population and an anticipated 50 % increase in those over 65 by 2035. At CPC, we have committed to doubling the number of homes that we are involved in delivering over the next three years from 5,000 to 10,000 – most of which will be in the North of England.
As ever, the key to increasing housing supply is to find suitable sites to build new homes.
In our cities, there is huge focus on marginal land where developers will have to contend with either building adjacent to or over railway or road infrastructure. Out of town new developments on green spaces are invariably contentious and met with NIMBYism.
This challenge is compounded further by the alleged land banking by developers to drive up property prices and boost profits. Sir Oliver Letwin MP has been commissioned to undertake an independent review into understanding why hundreds of thousands of homes have not been built, despite having planning permission. The review is due out in time for this year’s Autumn Statement, but the interim report has found that major sites can take up to 15 years to build out. One of the key issues relates to the “absorption rate”, which is the rate newly built homes can be sold into the market without materially affecting the market price.
We await the final report later this year to determine if there are other issues relating to skills shortages, low productivity rates and lack of modular solutions in building what are often repeatable units, as well as the recommendations from the review to increase the required number of homes to meet the Government’s targets.
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Category: Steve's Blog