BDO: Housebuilding targets ‘unrealistic’

Developers and housing associations feel delays in the planning process are hindering residential development in the North West according to research by accountancy and business advisory firm BDO.

A survey by BDO found that 94% of managing directors and chief executives from major developers and housing associations thought government targets of 245,000 new homes each year for the next two years are unrealistic. The planning process is still the main barrier to development, closely followed by land availability.

In the North West, the estimated demand for new homes is up to 19,600 each year. While the target was deemed 'unachievable' according to survey responses, housing bosses thought that if the planning and land availability challenges are addressed, they could on average increase output by 19% annually.

More than half of respondents thought the National Planning Policy Framework has made no difference. Around 18% of developers reported that the NPPF is creating more problems than it is solving, such as imposing developments on local communities without the appropriate infrastructure to support it.

The report showed that housebuilders want to see the introduction of mandatory response times for planners, to help speed up the planning process and for the government to release surplus land for development.

Smaller initiatives which respondents felt could really boost development include government support of the construction sector to help develop skills. More power given to local authorities via devolution would also be impactful, as well as alternative sources of lending.

Tim Entwistle, partner and head of BDO in the North West said: "While sentiment regarding the achievability of government targets is wholly negative, what is really surprising is that it can be rectified with a few small tweaks to planning policy and to the distribution of public sector land.

"The general election is the right time for all political parties to address the barriers to housebuilding. The Help to Buy ISA announced during the Budget is a step in the right direction and would serve to support more first-time buyers in the region to get on the housing ladder. However, let's hope the government takes the opportunity to help developers with the supply issue before the demand for such an incentive takes hold."

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Until the Government look at the problems within the local council and the constraints within their own planning policies, the targets for house building will never be achieved. You cannot get past the NIMBYs of society and nobody is man enough to stand their ground and apply the framework as it should be for fear of a backlash from voters – its all down to elections and fear of standing above to make a decision

By MadBlonde

I don’t really buy that the issue is with ‘planning’ – sure local plans are battling to be approved but if the issue is rather with infrastructure then councils can do very little about funding that. I note in the piece there is very little comment on the ‘land availability’ issue – and this is more of a key issue. If most of the value gain of planning permission for housing goes to the most unproductive ‘rent seeking’ part of the process (the landowner)then there won’t be any money left for infrastructure. Why can’t anyone see this? A lot of CIL contributions can’t be applied because it would make the development ‘unviable’. Why is it unviable? Because land costs are too great

By Sceptic

Sceptic has hit the nail on the head. If we did proper planning in this country where land acquisition, infrastructure development and place making was separated from housing construction we would get thousands more houses built very quickly and quality would be much higher. Builders would be incentivised on quality rather than competing for land and restricting supply as at present. Unfortunately with the whole development process totally dependent on a few, large integrated private developers, operating a dysfunctional market, we naturally end up with low output, poor quality, stretched infrastructure and miles of characterless sprawl. No wonder house builders are fighting NIMBYISM at every step. But they really have no one to blame but themselves and their business model (highly profitable though it may be).

By MillRow WimBerk