The start of 2016, brought with it the news that the UK government will commission the building of thousands of homes on public land, a move that will allow smaller developers to buy sites with planning permission in place. The change in government policy is designed to alleviate the pressure by the industry to deliver new homes. The team at Experience Invest investigates.
A “radical new policy”
The new policy is being branded by the government as ‘radical’. It is anticipated that up to 13,000 new homes will be built on five publicly-owned sites in 2016. Around 40 percent of these will be ‘affordable’ or ‘starter’ homes.
The news was welcomed by The Federation of Master Builders (FMB), the largest trade association in the UK construction industry. The FMB champions for continuous improvement in building standards.
Commenting on the news, Brian Berry, chief executive of FMB, said: “The Government clearly recognises that we need to bring more small house builders back into the market if we have any hope of addressing the housing shortfall. Directly funding developments on publicly owned land, with planning permission already granted, should encourage growth of smaller builders and new entrants into the market.”
Though, as Berry suggests, “if the Government wants to truly tap into the potential of SME house builders, it should bring forward a wide range of packages of land, including those attractive to the smallest of developers, thereby improving both capacity and speed of delivery.”
As reported on the Property Wire website, the Home Builders Federation (HBF) also embraced the news. However, the organisation – commonly referred to as the ‘voice of the building industry, has insisted that the changes in government policy should be part of a ‘wider set of measures’ that will assist smaller and medium-sized building companies.
A shift in responsibility
According to an article published by the BBC, directly commissioning new homes projects on public land will allow the government to ‘assume responsibility for developing land, instead of large building firms’, hence giving SME builders a greater chance of getting involved.
Speaking on Radio 4’s Today programme, Greg Clark, the Communities Secretary, emphasised the need to ensure more homes were built by engaging more SME builders. He said: “We know that consistently 90% of people aspire to own their own home, and for many years now home ownership has been in decline.” He went on to say that “the eight biggest building firms accounted for 50% of the house-building market, and there was a need to involve smaller and medium-sized companies.”
The HBF, on the other hand, believe that direct commissioning will only be successful “if it speeds up the release of public sector land and results in more house building than would have happened using the more traditional methods of public sector land disposal,’ as the HBF’s executive chairman Stewart Baseley points out.
About Experience Invest
Experience Invest is a London-based independent property company specialising in residential investments, student property and care home investments. The company operates across the UK and internationally, and is regularly featured in the property news – see The Telegraph, on Yahoo Finance, and by Reuters for examples of recent articles.
Experience Invest works with a range of clients, from first time investors to high-net worth individuals, offering them unique access to properties not always available to individual investors.