Why Can't We Build Enough New Homes

Can We Ever Build 250,000 New Homes Every Year

We all know that in order to meet the required demand of new homes we have to build around 250,000 new homes every year. This may seem like a tall order and the government has made significant changes to the planning system to facilitate this but sadly it seems unlikely the target number of new homes is likely to be met now or in the near future. We need to build 240,000 homes every year to stop house prices spiraling upwards both in the housing market as well as the rentals sector. The government has not set an impossible target, post war Britain saw the UK building around 300,000 for a couple of decades immediately after the war but we are now only building around half of that.

It is because we are not building enough homes that we have seen house prices continue to rise. The highest number of homes built was in 2006-7 when we managed to build 219,000 homes were built. The financial crisis put paid to this and the number of new homes built crashed and hit a post-war low of 135,000 new homes. This figure has not improved much and last year saw around 140,000 new homes built. The target of 250,000 new homes that are necessary each year was set by the Labour government back in 2007 after a review but has now been abandoned by the coalition government

Planning Reforms Introduced

The government has made it easier to build homes by reforming the planning system but there are still complaints from housebuilders and architects who believe that the planning system is still far too slow and beaurocratic. There are also complaints that the planning system is far too expensive. The government refutes this and said that the number of planning permissions granted in the year to September 2014 was 240,000. The government claims that this is proof that the planning reforms are working.

There has been a steady increase in the number of planning permissions granted each year since the coalition came to power. Figure released show that numbers have risen from 158,000 in 2011 to 189,000 in 2012, 204,000 in 2013, and 240,000 in 2014. That being said the government now has to increase these figures further still and hope that this trend continues to grow. In order to build 250,000 new homes every year the number of planning permissions granted needs to increase significantly because not everything that is granted planning is built .

Shortage Of Available Land

Whilst the government has set new targets for new homes of around 200,000 a year it has been accused of failing to provide enough suitable land on which to build these new homes. Affordable land needs to be provided by local government to build social housing and affordable homes and this has not been done. Land prices have risen very sharply over the last decade and saw an increase of 170% between 2000 -2007.

Local councils have also been accused of not identifying suitable sites for development of affordable homes for local needs. The government has said that it has identified former surplus public sector land for development that has been used to build 100,000 new homes during the current parliament and will commit to provide enough land and buildings to build another 150,000 new homes during the next five years.

Building On Green Belt

Of course we all know that the property developers would like to get there hands on the greenbelt land. However this is such a controversial issue that it is highly unlikely that any government would relax the rules around building on green belt because there would be an enormous backlash and would be very very unpopular. Many argue that there is enough land already to build on and that the UK's biggest housebuilders are holding onto land in their land banks and should be building on that land instead.

Housebuilders are in possession of large swathes of the Uk but does not build these sites out quickly enough because it is not in their interest to do so. They stand accused of sitting on land as house prices go up. They benefit from the increase in house prices which boosts their profits. Some experts believe that the government must take control of the UK's largest sites so that the biggest sites are not under the control of property developers. The problem is that unlike post-war Britain the government no longer builds new homes and therefore relies on these big companies. Right up until the 1970s's the state used to build 100,000 homes every year but changed after Margaret Thatcher was elected in 1979.

Calls For State Building Again

There are now calls from the Labour Party and The Liberal Democrats for the state to start building council houses again so that we are no longer reliant on the private sector. This can be seen with the announcement of two new Garden Cities that will be build in Ebbsfleet, Kent & Bicester in Oxford. The government is reluctant to get involved in house building and will still need the UK's property developers to help build these homes. It could be argued that the government should take control of these sites and get Britain building again especially if you consider how much money has been spent bailing out UK banks. It would create tens of thousands of jobs and would provide these much needed homes.