Will Recent Affordable Housing Proposals Solve the Shortage in the UK?

The property industry has witnessed some considerable figures during the past 12 months. House prices soared by 12.1% from January to September, adding an average of £20,000 to the price of a UK family property - largely due to insufficient house building and detrimental government schemes over the past decade. One in four under-35s now live with their parents, while London boroughs such as Hackney, that have witnessed a house prices rise of more than 800% in less than 30 years, have become symbols for today’s unaffordable market. Affordable housing is now a subject of concern for people across the UK and around the world, with experts likening the shortage to a ‘ticking time bomb’. As the country’s population continues to increase, how can the UK address this well-established problem in order to meet future demand? We take a look at a handful of current innovations and how the government could do more to meet the demands of its people.


Autumn Statement Construction Highlights


This year’s Autumn Statement included some welcome news for the next generation of homebuyers and the property industry. To combat the chronic property shortage in the UK, a radical government-led programme will be implemented that will send a strong message to private companies that continue to fall short of the national house building target of 300,000 new homes per year. The Homes and Communities Agency scheme, which plans to create a small town with 10,000 homes at a derelict RAF base in Cambridgeshire as its first pilot project, is the first government-led construction scheme since the 1970s. During a strong speech in the House of Commons, Danny Alexander, the Chief Secretary to the Treasury, said: “The message to the house-building sector would be simple: if you don’t build them, we will.” In order to create a functioning town, The Homes and Communities Agency has included infrastructure into drafted plans to increase accessibility.


Fresh Planning Processes


Amendments to Section 106 of the Town and Country Planning Act 1990 have also influenced the headlines following the chancellor’s Autumn Statement. In a stark contrast to the government-led growth scheme outlined above, the removal of affordable housing obligations for developers when constructing small sites has been implemented. The revised agreement, which will affect local council rights to appeal for more affordable housing, falls under the 2013 Growth and Infrastructure Act. Although the move does little to ease more affordable housing into the market, small developers have welcomed the scrapping of charges for developments of 10 homes or less by the Local Government Secretary Eric Pickles. According to the Department for Communities and Local Government, this elimination of council charges will result in an average saving of £15,000 per home. Following the announcement, Pickles highlighted that: “By getting rid of these five- and six-figure charges, we will build more homes and help provide more low-cost and market housing.” While the lack of charges could reignite a now stagnating construction industry, the decrease in affordable housing obligations could result in high-value property developments that are aimed at wealthy buyers and overseas investors to increase revenue.


Garden Cities


From Gordon Brown’s ‘eco-towns’ to the ambitious Academy for Sustainable Communities - which hoped to teach the fundamentals of regeneration to the next generation – UK garden city plans have been brought forward several times only to be pushed to the side-lines. However, the time for garden cities may finally come to fruition as Nick Clegg recently announced plans for up to three new garden settlements. According to reports, the coalition have chosen Bicester in Oxfordshire as its location for its second garden city, with more than 13,000 homes in the pipeline. The development of garden cities stretches back to 1903 to the construction of the UK’s first garden city in Letchworth which combined “the best of town and country living". 27 new towns were built after World War Two, including Milton Keynes, Stevenage and Peterlee. These fresh towns, which included large green spaces, were built to combat issues facing the country at the time, including bomb damage and a baby boom. During his announcement, Nick Clegg called for modern-day “visionaries” who would follow in the footsteps of 1940s politicians to face a new set of challenges. While some would argue that these uniform garden cities - which were conceived in a short space of time - lack character, the need for fresh construction land is undeniable.


Combatting the Current Skills Shortage


As we delve into the issue further, it becomes apparent that the problem is widespread across several industries. The UK is currently facing a high-level skills shortage that is affecting the construction industry and house building targets year-on-year. According to the CBI, the industry needs around 20% more surveyors, construction managers, electricians and bricklayers to meet the 300,000 home per yeah quota. 2008 saw around 400,000 professionals leave the industry and the closure of brick factories in the wake of the recession. While solutions have been hard to create, the UK Commission for Employment and Skills (UKCES) has recently composed a report with five action points to bring together employers and education schemes and courses. The action points, which include employers improving skill levels, work and education integration and an increase in apprenticeships, hope to ease the stigma attached to vocational studies during education. The CBI and UKCES are now reliant on industry, unions, educators and government to work together to increase the number of skilled workers in the UK rather than looking to other parts of Europe for a workforce.


LD Events’ hugely popular National Affordable Housing Conference will be held in London’s Cavendish Conference Centre on 17th March, 2015. Leading figures in residential housing will discuss the theme of delivering ‘Real Housing for Real People’. Presentations will be provided by some of the most influential figures in the sector and the event will provide a massive networking and market analysis opportunity. Due to high demand, early bookings are required to guarantee a place at the conference. Please visit our website for more information.