Report seeks ‘radical plan’ to halt building decline
The number of new homes built across Britain may fall in 2012 despite government measures to increase development, a leading property firm has warned.
In its Land and planning 2012 report, Jones Lang LaSalle suggests more radical intervention will be needed to support the housing industry.
The company surveyed around 100 land buyers at developers of different sizes for the report, and found a degree of indifference to government reforms.
Seventy two per cent said planning reforms such as the introduction of the national planning policy framework would make no difference or only make it ‘slightly easier’ to acquire sites. And 50 per cent said the reforms will make no difference to the size of their development programme.
A study from estate agency Knight Frank, published earlier this week, came to similar conclusions, with respondents suggesting government incentive schemes were not attractive enough to make much of a difference to house building numbers.
Both surveys also found a shift towards building larger family homes rather than flats and apartments.
Jon Neale, director of residential research at Jones Lang LaSalle, said getting finance is the main problem facing the industry.
‘Debt is becoming less available, and for smaller companies at least, this means that fewer sites will be developed out,’ he said. ‘Equity is becoming more prevalent, but it is highly selective and focussed on high-value markets – it cannot make up for the retrenchment of conventional funding.’
Jones Lang LaSalle found London was an exception to the trends seen in other parts of the country, with land prices rising, and developers still keen to build smaller properties, but it warns the price of land may be unsustainable.
Mr Neale said: ‘During the Great Depression of the 1930s, Britain’s booming house building industry produced well over 200,000 houses per year, insulating us from the worst effects of the global economic freeze.
‘Given recent economic data, the government needs to reconsider its approach to housing and formulate radical plans to unleash a wave of building. This is not just an economic argument, it is also a social one – all the statistics point to vast undersupply of housing, increasing overcrowding and rising levels of homelessness.’