Builders question impact of new homes bonus
House builders have questioned the effectiveness of government construction policies with 81 per cent saying the new homes bonus will have little effect.
A survey of more than 100 builders from estate agents Knight Frank has found increasing scepticism about the incentive scheme, and only lukewarm support for other government initiatives.
On the new homes bonus, which rewards councils for approving housing developments with payments worth 100 per cent of council tax revenue from the properties for six years, the proportion of developers who said the scheme would have little impact increased from 63 per cent in 2011 to 81 per cent in 2012.
Lack of mortgage finance was identified as the most serious problem facing house builders, although two thirds felt the Newbuy mortgage indemnity scheme could boost development volumes.
There was also concern about the new national planning policy framework and move towards giving local authorities more power, which 54 per cent of respondents felt would slow down the planning process and result in fewer homes being built.
Despite the concerns builders expect a modest increase in the number of homes built over the next 12 months, and a 1 per cent rise in prices.
Gráinne Gilmore, head of Knight Frank UK residential research, said: ‘Curtailed funding, planning confusion, onerous levies and economic turbulence mean we are still navigating a difficult period.
‘However there are signs of optimism, and the green shoots can clearly be seen in our survey. We expect development volumes to rise modestly over the coming year, especially in the delivery of larger, family homes.’