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I spoke recently at the Alan Cherry Debate about what house builders can do directly by themselves, and in partnership with the public sector, to improve the short and long-term supply of new homes.

What are the challenges in increasing housing output? - Part 1, by Richard Cherry

Here are the key points:

• The forecast growth in population and household formation across London and the South East over the next 20 years is so great that a radical approach is required to land supply. Supply is needed right across the regions and not just in a few ‘growth’ areas, particularly if local market capacity is weak.

• Local authority housing estates represent a potentially huge opportunity to increase overall supply through increasing densities, secure brand new affordable housing assets and regenerate neighbourhoods.

• Construction delivery needs to improve.

• We need shared equity schemes in place for the long-term.

• The private rented sector has an important contribution to make.

• Local authority planning departments need to be better resourced.

• We need more small and medium sized sites to deliver more new homes in the short-term.

Local Authority housing estates

Most estate regeneration projects carried out across London and the South East over the last 25 years have necessarily concentrated on the replacement of housing in physically very poor condition. However, local authorities own around 500,000 homes across London with tens of thousands more across the South East. I suspect that a considerable proportion of this is on estates that have redevelopment potential. Moreover, whilst the Decent Homes Programme has led to improvements in basic standards, I also suspect that a great deal of the existing Local Authority housing stock falls well below current space, amenity and environmental standards, imposing continuing high management costs on local authorities at a time when, with HRA reform, there is a huge incentive to minimise these.

We’re very excited by the potential scale of such a programme. We are developing a range of new services for local authorities, which build on 30 years of partnership with them. This includes direct joint venturing between house builder and Council. These will enable Councils to: maximise the financial benefits of redevelopment; increase housing supply; raise the quality of their affordable stock; secure sustainable regeneration at a neighbourhood scale. A vital part of that will be non-residential uses such as schools and community facilities that are so desperately required to meet the needs of rapid population growth.

Such redevelopment must be delivered to top class standards of design, with the right provision of community facilities and with the appropriate mix of tenures to suit the full range of need and demand. The regeneration of the South Acton estate in Ealing is a great example of this with an increase of around 30% in the number of homes in the area.

Construction delivery

We are in the early stage of a pick-up in the housing market and the industry is already experiencing serious and in some cases critical problems with construction delivery. A major constraint to the long term acceleration of house building is the capacity of the construction supply chains. There is already a marked shortage of well trained and skilled labour and management across our industry, and it is forecast to get worse.

But house builders have to do more to help ourselves. For example on most of our regeneration projects we are required to provide training and work experience initiatives for local people.

I would advocate extending this to all housing projects above a certain threshold. It would be good for the industry and the economy in the short term and in the longer term will help create a sustainable work force for the industry.

Shared equity

Central Government has done a great deal recently to help increase housing supply and sales activity, particularly through Help to Buy 1 – equity share. However, demand is at its highest in London for households with an income of less than £50,000 pa. but the opportunities to buy here are extremely limited.

One way forward to securing a long term supply of equity share homes would be for landowners to provide equity share support for first time buyers. Landowners could take the benefit of equity share loans instead of cash payments for land.

We have been involved in a number of these arrangements where enlightened public, and some private landowners, have responded very positively to our proposals to create equity share support, unlocking regeneration in otherwise unviable situations.

In part two of this blog, which I will post next Tuesday, I will look at the vital roles that the private rented sector, planning and land supply play in new housing supply and how they can be improved.

How would you increase housing output?

Richard Cherry

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About this blog

Here you’ll find property related blog articles from the team at Countryside as well as independent experts. Expect regular tips and advice on topics such as buying a new home, interior and landscape design, setting up home, mortgages and finance, plus articles on architecture, the property market, regeneration and more.

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