Barriers to building new homes and how to overcome them
While the limit on borrowing against council’s Housing Revenue Accounts (HRA) ended in late 2018, it has not provided the ‘catch all’ solution the government stated at the time. Of course, it has proven to be hugely beneficial, but many councils still face insurmountable hurdles that make it difficult to building the amount of housing they need. Here we look at some of the current challenges facing local councils and possible solutions that could help resolve them.
Land availability
According to a survey carried out by the Federation of Master Builders in 2021, 63% of small builders believed they were limited in their ability to build new homes due to a lack of available land. Combined with the high demand set by the government, many councils are also starting to consider building on the greenbelt land.
For example, the Black Country Plan for Walsall, Dudley, Sandwell and Wolverhampton was approved for consultation in 2021, with the aim of delivering over 76,000 new homes by 2039. However, even if every brownfield site was used, council officials say that it would still not be enough land available, putting greenbelt land into the mix.
It’s not as if there isn’t enough land to go round, but the problem lies in ownership and costs. Land is traded several times over before it gets to the housebuilder and even then, they’re in no rush to start work. For example, a 2015 investigation into ‘land banking’ revealed that developers had ownership of 600,000 plots of land – four times the number of homes built the previous year.
Ensuring land is made available at affordable prices will not only make it easier to build, but also reduce the need for government grants. Reforms to land value capture (which is currently being reviewed by the government) will play pivotal role here, empowering local communities who will directly benefit from long-term, sustainable social housing projects.
Planning system
The ‘discretionary’ approach taken by the UK planning system continues to cause several issues in the social housing sector. Over the past 5 years, social housebuilding has averaged less than 6,500 homes a year, which is nowhere near enough for 1.1 million people currently on the waiting list.
Section 106 agreements are the primary route of delivery for social housing projects and now account for more than half of all new social homes built in England. The government is proposing to scrap Section 106 and replace it with a flat levy on the final value of all new developments. While it’s good to see the government is looking to improve on an often slow and laborious system, there are doubts as to whether the levy system is a practical solution.
A workable alternative could be to instead increase in government grants for social housing. Reforming the planning system by itself will not be enough to deliver the amount of social housing needed and a sustainable increase in capital investment can help ensure enough homes are built on a consistent basis.
Public sector architect support
Tereyn Architects love working with local councils and authorities on public sector projects to meet the growing needs of our local communities. To find out more and to see how we can help your next project, get in touch today on 07984 760 920, send us a message here or email us at info@tereynarchitects.com and we’ll get right back to you.
