Five things that the ninth Housing Minister in twelve years must do to assist the market.
David Bexon, Managing Director of smartnewhomes.com:
“In June, the UK property industry received its fourth Housing Minister since the start of 2008 - the ninth person to hold the position in twelve years of Labour Government.
“The revolving door syndrome now attached to this post is not helping an industry that requires stability and solid long-term restructuring if it is to avoid any further damage from the ongoing effects of the credit crunch.
“John Healey’s appointment has brought with it fresh calls for increased action to support the housing industry. The extent of the task facing the new minister cannot be underestimated, but there are some fundamental areas of concern that should be established as a priority from the very start of his tenure:
1) Kick-start the production of new homes
“The Government has chosen to stand by its housing targets but has so far failed to deliver efficient measures to significantly boost production. Developers need far greater financial support than the paltry sum pledged for this in the Budget, if we are to avoid an imminent shortfall in supply as a result of the severe lack of new home starts during the downturn.
“The housebuilding industry has been hit extremely hard by the credit crunch, with redundancies, loss of revenue and decreased land values. Major support is needed to meet the Government’s housing aspirations and the needs of the nation - support that will help developers to both kick-start stalled projects and commence new schemes. As things stand, developers are ill-equipped to meet pent-up demand as the market begins to show clear signs of emerging recovery.
2) Address the level of lending from Britain’s nationalised banks
“While some improved mortgage products have started to appear in recent weeks, these are still relatively few, and only a small amount of people have so far been able to take advantage of the historically low interest rates. Billions of pounds have been drip-fed into the UK banking system, and the new housing minister must look for new ways to persuade the nationalised banks to relax lending criteria and increase their supply of mortgage finance.
3) Readdress Britain’s available land bank
“Mr Healey will need to outline a new strategy for increasing the amount of land that is made available for development. Circumstances dictate that the Government now needs to be more lateral in its approach to this subject and utilise the resources at its disposal to a greater effect. The brownfield land available through English Partnerships has provided a great source of new housing for the UK, but planning restrictions have hindered progress on many sites that have the potential to significantly boost availability of homes nationwide. The MOD also has a great deal of redundant land at its disposal, i.e. closed barracks, that should be turned round more rapidly for development.
4) Boost affordable options
“The housing minister will no doubt be focusing much of his efforts on delivering affordable housing, but greater support and incentives will be required for developers to continue meeting their obligations for producing these homes.
“The Government backed Homebuy initiatives have been a step in the right direction towards giving struggling homebuyers a foot on the property ladder. However, the funding that has been made available for these schemes is not sufficient to cater for the overwhelming demand for home ownership in this country. The schemes are heavily oversubscribed and it can also take a long time for buyers to be assessed for eligibility and finally approved.
“The Homebuy programme could be a key enabler in the recovery process, but the new minister will need to review funding and ensure that the Government is maximising its potential. Lenders will also need to be convinced to play their part in this by improving the supply of mortgages for shared ownership property. At the moment there is limited availability, as Banks continue to hold an archaic view on the risk associated with shared ownership.
5) Review the planning system and introduce clear surveyor guidelines
“I do not expect the new minister to lower the Government’s overall new home targets. While increasingly implausible, the projected figures reflect the level of demand in the UK, which was out of sync with supply even before the credit crunch worked to damage the number of new home starts. However, this all rests on the strength of the housebuilding industry, so anything that acts as a barrier to its efficiency and profitability will need to be addressed.
“Valuations in the newbuild sector have been disproportionately effected by market conditions during the downturn, with many surveyor decisions being influenced by forced re-sale prices and bulk discounts. Clear guidelines for valuing newbuild property should be introduced to ensure that the sector is treated fairly.
“Mr Healey will also need to look at improving the flexibility and speed of the planning process, and readdress section 106 restrictions to fit in with the current climate.”
See Also: Press Releases (379), Housing Minister (16)
Date Published: 12 June 2009
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