Housing Futures Housing Supply John Stewart HBF Director

Housing Futures Housing Supply John Stewart HBF Director of Economic Affairs 17 July 2007

Housing Futures Housing Supply 1. Plan-led System 2. Housing Land Supply 3. Housing Target 4. What is to be done?

1. Plan-led System

1. Plan-led System Housing under-supply inevitable in planled system in market economy • Politics • Site drop outs • Windfalls/brownfield

2. Housing Land Supply

‘Delivery’ Market Based • • Housing ‘delivery’ depends on: Land market – competitive price setting Developer profitability (margin, ROCE) Housing market – developers price takers Supplemented by social house building (but >50% ‘Affordable Housing’ via S 106)

Sources of Increased ‘Delivery’ Three components of ‘net additions’: • New homes (~90%) More land with planning permission and/or Higher densities • More conversions • Net of demolitions

Land Banking • House builder land banking – a myth, beyond operational requirements (Barker’s conclusion) • Large stock of outstanding permissions?

Land Banking HBF survey of 21 large house builders 5. 1 years land in pipeline, of which: • 47% (2. 4 years) implementable permission (of which 97% started within 3 months) • 36% allocated or outline consent • 17% not allocated & no consent

3. Housing Target

Housing Target: England • 240, 000 net additions per year by 2016 • 3 million additional homes by 2020 • New homes: quality, zero-carbon by 2016 Household growth: 223, 000 pa 2004 -26

Assumes: 185, 000 net additions in 2007, 240, 000 in 2016, 3 million by 2020, 25, 000 pa conversions-demolitions

4. What is to be done?

What is to be done? • • Step-change in implementable residential planning permissions 160, 000 @ 40 per ha => 4000 ha 215, 000 @ 40 per ha => 5375 ha (+34%) 215, 000 @ 35 per ha => 6143 ha (+54%) 215, 000 @ 30 per ha => 7167 ha (+79%) Assumes: constant average site size; 25, 000 pa conversions less demolitions

Central Government • Policy, guidance, systems adequate • Monitor system and outcomes • Enforce/intervene – e. g. curb LA “interpretation”& avoidance of proper process • Adequate infrastructure funding & delivery • Communities England role? • Let markets work!

Regional Government • Set adequate RSS housing targets • Increase targets to hit 240, 000 pa – early priority • Cascade adequate targets down to LAs Regional Assembly role to be curbed? RDA role to be increased, RES driving?

Local Authorities • • • Accelerate LDD preparation Set key policies in LDDs, not SPDs SHLAAs* critical to delivery Realistic brownfield and greenfield assumptions Curb excessive cost demands on land values Want to make it happen! *Strategic Housing Land Availability Assessments

Industry House building, supply, energy, finance industries: • Skills and training • Construction methods, innovation, delivery chain • Materials and products (incl. Zero Carbon) • Local renewable energy provision • Finance • House building industry capacity expand • New home quality (design, product, satisfaction)

Housing Futures Housing Supply John Stewart HBF Director of Economic Affairs 17 July 2007