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House building crisis requires radical solutions

House building crisis requires radical solutions

🕔09.Oct 2012

Regeneration experts are calling for a radical new approach between the Government, local authorities and private sector investors in a bid to solve Britain’s housing crisis.

A target set by the Housing Minister for almost 300,000 new starts across the UK this year is certain to fall way short, with little more than 100,000 construction projects expected to get underway.

Birmingham, which plans to build 70,000 new homes by 2026, struggled to deliver more than 1,500 dwellings last year and the forecasts for 2013 are just as dire.

An increasing population, longevity and a consistent rise in the number of single-person households has put unprecedented strain on housing, where demand for accommodation is at its greatest since the 1950s.

Some of the biggest players in the housing industry told a fringe meeting at the Conservative party conference in Birmingham that attitudes towards the private rented sector would have to change if new build targets were to be met.

The meeting, organised by the Urban Land Institute, identified several problems:

  • Too many investors’ financial plans are modelled on lending money for privately owned homes, ignoring opportunities provided by the private rental sector.
  • A requirement for mortgage deposits of up to 40 per cent has cast home ownership into its biggest crisis for decades.
  • Council planning departments fail to understand how to deliver denser but liveable accommodation on inner city brownfield sites and remain stuck to a high-rise tower block mentality.

Nick Jopling, a director of house builders Grainger plc, said it was vital to find ways of getting institutional money into the private rented sector. Targets for new dwellings would not be met otherwise because no one could forecast when, or if, home ownership would recover.

Mr Jopling said: “No one doubts the need for rented homes. There is enthusiasm among all sorts of people to build, but it’s hard to find anyone to fund it.”

He urged councils to sacrifice Section 106 planning gain monies in an attempt to kick start development by the private sector.

Doubts about the deliverability of Birmingham’s house building target were expressed by Nick Ebbs, chief executive of the Igloo regeneration fund. Mr Ebbs said the housing market was “in meltdown” and Birmingham was only likely to meet its target if more efforts were made to develop brownfield land with higher density housing.

Mr Ebbs added: “Local authorities have a pivotal role to play here. They have the land and they control the planning system.

“We need to learn to build effectively at higher density. They do it very well in northern Europe, in Amsterdam and Rotterdam for example they have very high quality new neighbourhoods which we don’t even get close to here.”

One of the first policy announcements made by Birmingham City Council’s new Labour administration in May was a commitment to increase a house building target from about 55,000 to 70,000 dwellings by 2026.

However, council leader Sir Albert Bore claimed that there would not be enough land in Birmingham to accommodate such a high figure. He proposed asking neighbouring councils including Redditch, Bromsgrove, Lichfield and Solihull, to identify development land for new homes close to the Birmingham border.

Sir Albert said he hoped the Greater Birmingham and Solihull Local Enterprise Partnership would play a leading role in finding suitable sites.

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