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Is permitted development a risk to health and wellbeing?

Councils across England are warning that homes created using permitted development rights are a potential threat to people’s health and wellbeing, with the most vulnerable people in society being more at risk.

A new report ‘Housing for a fairer society: The role of councils in ensuring stronger communities’ has found that:

  • Half of councils in England think permitted development housing could threaten people’s health and wellbeing
  • Half of councils in England think vulnerable people are disproportionately negatively affected by permitted development
  • Demand for affordable housing has remained unchanged for four consecutive years, with 59% of UK councils reporting ‘severe’ shortages
  • The findings, published in a report by APSE (Association for Public Service Excellence) and written by the Town and Country Planning Association (TCPA), show that local authorities across
  • the UK are reporting ‘severe’ shortages of affordable housing for the fourth consecutive year, with only 2% claiming their need is ‘not substantial’

Further, three quarters of councils in England and Wales said they rely on developer contributions as their main source of income for delivering affordable housing, calling into question the efficacy of the government’s market-led approach to housing delivery.

Paul O’Brien, Chief Executive of APSE, said “It is ironic that as we celebrate a 100 years since the advent of council housing, and the ‘Addison Act’ standards on space and public amenities that were so innovative and important to the health and wellbeing of communities we are now witnessing a serious regression of these protections.

“Permitted developments are in danger of becoming the new slum housing of the 21st century, de facto permitting a dangerous slide into deregulated and ultimately damaging housing provision.”

Fiona Howie, Chief Executive of the TCPA added “Local authorities have a powerful role in shaping existing and new places that can enhance people’s health and wellbeing, but it is essential that they have the tools they need. This report highlights there is still much to be done to enable local authorities to deliver the affordable houses people so desperately need.”

Among the report’s recommendations is the suspension of the right to buy in England, the reinstatement of a definition of affordable housing which links affordability to income and the adoption of ‘community benefit clauses’ in planning policy to ensure that local authorities consistently maximise the wider benefits of the construction and development process.

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Homeless families now outnumber new social homes by 8 to 1

Analysis of the latest homelessness statistics by the National Housing Federation has found that for every one new social home built in England, eight families are accepted as homeless by their local council.

Government figures show that 42,810 families were accepted as homeless in England last year, 117 families every day, with more than two thirds of these single parents.

In comparison only 5,385 new social rent homes were built in the same period – equivalent to 14 per day.

Ten years ago, five more new homes for social rent were built every day than families accepted as homeless.

These homes are typically 50% of market rent and are therefore the most affordable and secure type of housing for these families.

Since councils have a legal duty to house children, homeless families are often housed in temporary accommodation. New National Housing Federation analysis has also found the number of children living in temporary accommodation has risen by 81% since its low point in June 2011, from 68,770 to 124,490 children. At the current rate of house building, it is likely to reach the highest ever recorded by 2022.

When social rent funding was halted in 2010, the number of new social homes being built plummeted. This has put a massive strain on available social housing, with increasing numbers of low income families left with no possible means of accessing a secure and affordable home. This has contributed to many more families ending up in temporary accommodation and staying there for longer.

In 2018 the government made its first commitment in ten years to building homes for social rent, but at £2bn this was only intended to build 25,000 homes over five years. Research by the National Housing Federation shows that England needs as many as 90,000 new social rent homes every year to house those most in need, including homeless families and those on waiting lists. This is over 17 times the number currently being built.

The National Housing Federation is calling on the government to invest serious amounts of money over the long term in building more social housing and to use the upcoming Comprehensive Spending Review to do this.

Kate Henderson, Chief Executive of the National Housing Federation said “The shocking disparity between the number of families made homeless every day and new social homes being built, puts into stark perspective how far away we are from meeting our housing need.

“Homeless families are just the tip of the iceberg, there are thousands more in equally desperate need, living in severe poverty, overcrowding and unable to afford their rent. This is having a lasting and detrimental effect on hundreds of thousands of children affecting their mental and physical health.

“This should be a massive wake up call for the government to take urgent action to increase the number of social homes being built every year, and commit significantly more funding for social housing in the next Government Spending Review.”

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£12.8bn needed every year to end the housing crisis

New research from the National Housing Federation reveals that the Government must invest £12.8bn a year to finally end the housing crisis in England.

Over ten years, this investment would kick start a nationwide housebuilding programme of around 1.45 million social homes to rent and shared ownership properties to buy across the country. It would stimulate the economy and help more buyers to get on the housing ladder, all while ensuring that millions of people no longer get stuck in inappropriate homes or on the streets.

Now, a coalition of leading housing groups and charities is calling for the Government to make this significant investment in ending the housing crisis. This includes the National Housing Federation – which represents social landlords to six million people – Shelter, Crisis, CPRE, and the Chartered Institute of Housing.

By investing £12.8bn per year, in today’s prices, they argue that the Government would take spending levels back to those last seen under Churchill’s government in the early 1950s, when enough homes were being built to meet the country’s needs.

The coalition argues that a stimulus from the Government is the only way to solve the housing crisis, since the private market alone cannot build the quantities or types of homes the country needs.

Over the course of ten years, this Government investment would amount to £146bn, including inflation. This would cover about 44% of the total cost of this construction boom, unlocking the rest of the money which can then be raised from other sources.

The research also finds that investing in new homes would add £120bn to the economy each year, through the creation of local jobs in construction and other industries across the country. Effectively, every pound spent by the Government would generate at least £5, boosting the economy in a balanced and sustainable way.

It would also reduce the Government’s benefit bill over the course of the decade. Last year, the Government paid £22.3bn in housing benefit, a significant amount of which went into the pockets of private landlords to help cover rent for millions of low-income tenants. By moving many of these tenants into social housing, the Government would need to spend less on housing benefit over time, and so could save taxpayers tens of millions of pounds every year. This would also allow more people to build a solid foundation for their lives in social housing, aiding social mobility.

This new financial modelling is based on research, conducted by Heriot Watt University for the National Housing Federation and the homelessness charity Crisis, which showed that England needs to build 145,000 social homes every year for the next decade to both clear the current backlog of people who need a home and meet future demand.

Last year the Government spent £1.27bn on affordable housing, making housing one of the smallest government budgets, down 70% on 2010 levels. As a result, far fewer social rented homes are being built. In 2017/18, just 5,400 were built, compared to almost 36,000 in 2010/11 before funding was cut.

The chronic under-investment in housing has led to a 169% increase in rough sleeping, while the number of households in temporary accommodation is at a 10-year high. What’s more, 1.3 million children are currently living in poverty in expensive privately rented accommodation, while many young people are stuck at home with their parents, unable to build an independent life and start families of their own.

Kate Henderson, Chief Executive of the National Housing Federation, said “The housing crisis is an economic, social and human catastrophe. But it can be solved. And now, for the first time, we know exactly how much it will cost. By investing £12.8bn in affordable housing every year for the next decade, the Government can ensure millions of people have a stable and affordable place to live, at the same time as strengthening the economy across the country.

“By investing this money in affordable housing at the upcoming spending review, the Government can help families all across the country to flourish. They can help children get out of poverty, give young voters a foot up on the housing ladder and help out private renters who have to empty their bank account every month.

“As well as being the right thing to do, investing to end the housing crisis also carries huge economic benefits. It will advance the country’s productivity, boost its economic growth and lower the benefit bill over time.”

Polly Neate, chief executive of Shelter, added “The steep decline in social housing is at the core of the housing emergency that now effects so many. Social homes are what this country wants and what it needs – they are the best solution to the problems we face and an opportunity to unite the country.

“Successive governments have failed to build social housing – while homelessness spirals and half of young people will never be able to buy. Now is the time to act for the millions of people trapped in housing poverty, and invest real resources where it matters most.

“Charting a course to build a new generation of social homes must be a key test for whoever walks through the doors of Number 10. The race to eradicate homelessness and provide millions with a stable home, is a race that every politician should be trying to win.”

Jon Sparkes, chief executive of Crisis, concluded “Right now, thousands of people across England are finding themselves on the brink of homelessness or are already experiencing it, in large part because of our huge shortage of social housing.

“The good news is we know it doesn’t have to be this way – and we know why this situation must change urgently. Homelessness has devastating effects on people’s mental and physical wellbeing that no one should have to experience. This can’t go on.

“Ultimately Government must invest in the number of social homes we need. Not only will this save the country millions of pounds in the long term, it will help us end homelessness once and for all – something we can’t afford to put off any longer.”

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Remove barriers to small house builders to deliver more homes

The Government needs to do more to remove the barriers to small to medium-sized (SME) house builders if its housing targets are to be met, according to industry experts the Federation of Master Builders, in response to the House of Commons Public Accounts Select Committee report, ‘Planning and the broken housing market’.

Brian Berry, Chief Executive of the Federation of Master Builders, (FMB) said “SME house builders are continuing to face numerous barriers to increasing their capacity to build the homes that are needed. The recommendations in the Public Accounts Committee’s report highlight that the planning system is delaying progress. It is completely unacceptable that sites are being stalled because planning departments are not dealing with applications quickly enough. Our members aren’t seeing any improvements in service since fees were increased in January last year – a policy the FMB supported.”

“The report finds that, as of December last year, only 42 per cent of local authorities had an up-to-date local plan which is truly disappointing. By allocating small sites for housing delivery in their local plan, local authorities will be reducing the burden of uncertainty for the nation’s small house builders, and therefore speeding up housing supply through better diversifying the sector. Furthermore, we must not forget the highly positive impact that these local businesses have on their areas, offering employment and training opportunities to local people.”

“Access to finance for SME house builders has undoubtedly improved over the last few years but the loan to cost ratio from most lenders is simply unviable for SMEs – especially the micro firms, building fewer than five units a year. The FMB House Builders’ Survey 2018 found respondents estimated that they could increase their out by 38 per cent if they could achieve a loan to value/cost ratio of 80 per cent. Government must work with the finance sector to understand how lending to small house builders can be increased and improved. The time is now for the Government to heed the warnings of the Public Accounts Committee.”

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Boost for housing market as Japan’s biggest housebuilder moves into UK

Japan’s biggest housebuilder will move into the UK housing market with immediate effect after striking a multi-million pound deal that will see it work with Homes England and Urban Splash to deliver thousands of new homes across England.

Sekisui House, one of the world’s leading housebuilders, are pioneers of modern methods of construction, where homes are built in factories and then shipped out to sites.

The £90m deal, which has been facilitated by lead real estate and financial advisor JLL, comprises a total new investment of £55m into regeneration company Urban Splash’s ‘House’ development business. It provides a significant boost to the UK’s modular housing industry and will help to speed up production of much-needed new homes.

Sekisui House have invested £22m of new equity, with £30m of equity and debt funding coming from the Government’s Home Building Fund, administered through Homes England.

Experienced entrepreneur Noel McKee, founder of We Buy Any Car, has also made a sizeable investment in the new partnership and will take an incremental c 5% stake.

Yoshihiro Nakai, President and Representative Director of Sekisui House Ltd said “We are extremely pleased to be able to work together with Homes England and Urban Splash to establish our operations and help to create outstanding communities in the UK.

“Using modern methods of construction to build high quality homes with short build times is one of our company’s great strengths. Our technology and know-how can help resolve pressing social issues in the UK, and I want to see us play our part effective immediately. These operations can also help bring vitality to UK regions, and we will work to make the strongest connections with the local communities.”

‘House’ is expected to deliver thousands of homes across England using modern methods of construction.

Minister of State for Housing, Kit Malthouse MP, added “Sekisui House bring with them a proven track record in harnessing the modern methods of construction that are transforming home building.

“Backed by Government investment, this announcement will support our urgent mission to deliver more, better and faster home construction to ensure a new generation can realise the dream of home ownership.”

Homes England, the government’s housing accelerator, has been instrumental in providing significant financial support and expertise to the new partnership as well as providing assurance to the investors.

Sir Edward Lister, Chair of Homes England, commented “When Homes England launched last year we said we’d disrupt the housing market to increase the pace of construction. By helping bring one of the world’s largest and most innovative housebuilders to UK shores, we’re putting our money where our mouth is.

“By creating a more diverse landscape – where smaller builders such as Urban Splash get a stronger foothold – we’re rebuilding the building industry; driving up quality and improving consumer choice.”

Tom Bloxham MBE, Chairman of Urban Splash, concluded “We believe that there is a real opportunity in the UK housebuilding industry. We hope to leverage our 25 years of place-making experience and our recent investments into modular housing by bringing in new partners; having looked far and wide we chose Sekisui House from Japan because of the company’s unrivalled global experience in modular construction and shared values and philosophy that we are making homes not units, and a joint belief in the need for a green future.

“We are also proud to partner with Homes England – part of the UK Government – because of their commitment to modular and desire to grow capacity in the UK housing business.

“We are incredibly excited about the accelerated production of much-needed homes and evolving traditional practices as we embrace the benefits of innovative offsite construction. I hope it will establish us as the housing partner of choice for landowners – both public and private.”

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A third of councils are failing to solve the housing crisis, according to experts

According to the housing delivery test results released by the government, which shows that a third of local authorities are failing to address the housing crisis.

The results show that 108 local authorities delivered fewer than 95% of the homes they need. This means that they must set out action plans to explain why they missed their targets and how they will address that.

In addition, 87 of these local authorities failed to deliver 85% of the homes they need and will therefore be subject to a buffer, which requires them to add 20% more homes to their five year land supply.

No area delivered fewer than 25% of their housing need, which means none will face the ‘presumption in favour of sustainable development’ penalty. However, the presumption penalty threshold will increase to 45% from November 2019 and to 65% in November 2020.

If the Government had not given areas three years to meet the 65% threshold, 32 local authorities would have been subject to the penalty.

The National Federation of Builders (NFB) recognises the challenges local planning authorities face in meeting the demand for housing, but remains concerned that so many councils are missing their targets, leaving us a shortfall of more than 220,000 new homes.

As local developers, NFB members would have preferred local authorities be in control of their own housing destiny but, since many are failing in their duty to meet housing demand and underestimating housing need, we welcome the blunt instrument that the Government is wielding.

Richard Beresford, chief executive of the NFB, said “Since the carrot of meeting housing need themselves is not enticing enough for local planners, the Government’s stick of penalties and buffers is clearly required. We have a housing crisis and the Government is taking appropriate steps to fix it.”

Rico Wojtulewicz, head of housing and planning policy at the House Builders Association (HBA), concluded “Councils need to do a better job assessing housing need and identify where homes can be built more quickly. If they continue to underestimate demand and focus on large, controversial developments, we expect the housing crisis to worsen and the Government to take control from failing councils.”

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Housing delivery will be hampered by skills shortage, warns experts

Small house builders predict that skills shortages in the building industry will hamper housing delivery and will eventually overtake access to finance as a bigger barrier to building new homes, according to recent research conducted by industry experts, the Federation of Master Builders.

Key results from the FMB’s House Builders’ Survey, the only annual assessment of small and medium sized (SME) house builders in England, include:

  • A lack of available and viable land tops the list as the most commonly cited barrier (59%) to increasing housing delivery and almost two-thirds of SME house builders (62%) believe that the number of opportunities for small site development are actually decreasing (up from 54% in 2017)
  • The percentage of SME house builders saying that a shortage of skilled workers is a major barrier to their ability to build more new homes rose to 44% (up from 42% in 2017)
  • Nearly half of small house builders (46%) say access to finance is a major barrier to their ability to build more new homes
  • More than half (51%) of SME house builders view the planning system as a major constraint on their ability to grow and ‘inadequate resourcing of planning departments’ was again rated as the most significant cause of delay in the planning application process for the third year in a row
  • When asked to look ahead over the next three years, more firms cited skills shortages as a likely barrier to growth than access to finance

Brian Berry, Chief Executive of the FMB, said “Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes. The construction sector is heavily reliant on EU workers with just under one in ten workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face. Given that the UK will leave the EU in less than six months, house builders are understandably concerned that skills shortages could worsen and choke housing delivery. In order to combat this skills crisis, the construction industry needs to encourage more entrants into the industry and develop higher quality qualifications. It is critical therefore that the Government doesn’t pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.”

“Our research also shows that the Government must continue to address the issue of access to finance for SME house builders. Although concerns over access to finance have eased slightly in recent years, in part thanks to the Government’s funding schemes such as the Home Building Fund, there is more that can be done. Our research suggests that it is the low percentages of project cost that builders are able to borrow that remain the greatest financial barrier to increasing their levels of house building. This latest research suggests that if firms were able to borrow 80 per cent, rather than the current 60 to 65 per cent of project cost, SME builders would be able to bring forward on average 40 per cent more new homes. Given the ambitious house building targets the Government is working towards, we cannot afford to ignore such a chance to significantly increase housing delivery.”

“A lack of available and viable small sites tops the list of frustrations for SME house builders for the fourth year in a row. Worse still, nearly two-thirds of these small builders believe that the number of opportunities for small site development are decreasing. However, the recent reforms to the National Planning Policy Framework, which specify that 10 per cent of a local authority’s housing delivery must be on sites no larger than one hectare, will help to address this problem. This will help to speed up the delivery of homes and lead to a more diverse and resilient housing supply.”

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Residential sector looking positive

The residential sector had a particularly positive February with £1.7 billion contracts awarded, an increase of 13.1% on January. Residential unit numbers also increased – up by 5.4% on January at 9,850 units. Following residential in terms of contracts awarded was infrastructure with a 13.9% share and education with a 12.3% share.

Barbour ABI

The latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI highlights levels of construction contract values awarded across Great Britain. This month it shows the total value of construction contracts awarded in February 2019 was £5.4 billion which is a 0.5% decrease on January, but 10.6% higher than February 2018.

The top project awarded during February was the £250 million redevelopment of Chelsea Barracks which sees Multiplex Construction Europe provide a total of 88 residential units in a single 5 storey structure. The largest infrastructure contract was the £110 million redevelopment of the former Royal London Hospital site in Tower Hamlets to provide a new civic centre and council offices. The largest overall education contract was in Edinburgh and was the £90 million redevelopment and extension of the Darwin Building for the University of Edinburgh.

Barbour ABI

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£3.7 million to fund 5 new garden towns across Britain

Five brand new garden towns have been unveiled unlocking up to 64,000 much-needed homes across England, the Minister of State for Housing has announced.

The locally-led new communities, from Hertfordshire to Gloucestershire, will receive a share of £3.7 million of funding to fast-track specialist survey work and planning works necessary for each new town’s development.

The funds will be spent by councils to help to deliver the homes and infrastructure needed for both neighbouring communities and future residents who will call the new town home. This includes specialist survey work and planning applications.

The 5 successful bids are:

  • Grazeley Garden Settlement, delivering up to 15,000 homes
  • Hemel Garden Communities, delivering up to 11,000 homes
  • Easton Park Garden Community, North Uttlesford Garden Community and West of Braintree Garden Community, an opportunity to deliver up to 18,500 homes
  • Tewkesbury Ashchurch Garden Community, delivering up to 10,195 homes
  • Meecebrook, in the north of Stafford borough, delivering around 10,000 homes

Councils and groups from around the country submitted more than 100 ambitious proposals with the 5 taken forward receiving an initial £750,000 to help develop plans for vibrant, thriving settlements where people can live, work and raise families.

The announcement is the next step in the government’s drive to build the homes this country needs, and follows the news last month of a £9 million investment to speed up the building of existing garden towns and villages.

Minister of State for Housing Kit Malthouse MP said “These new towns will not only provide homes for families, but will be vibrant communities where everyone, including neighbouring communities can benefit from new infrastructure – leaving a legacy for future generations to be proud of.

“I congratulate these councils who have put forward ambitious proposals, which will build many thousands of high-quality homes, and am pleased to support them as they work to make these plans a reality.”

Garden communities can take the form of new villages, towns or cities and have the potential to deliver well designed homes at an increased scale, boosting the local economy and creating new jobs.

The 5 new schemes will join the 23 existing garden communities the government is currently supporting, which are already delivering new homes today, bringing us closer to the government’s aim to deliver 300,000 new homes a year by the mid 2020s.

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Government will fail to keep housebuilding promise of 200,000 homes by 2020

MP Kit Malthouse has admitted that the Government will fail to keep its 2015 election promise to build 200,000 starter homes by 2020.

In 2016, the Government allocated £1.2 billion to the ‘starter homes’ programme, which aimed to build 200,000 properties exclusively for first-time buyers at a 20% discount on their market value.

When asked how many starter homes had been build since 2016, the housing minister stated: “At the moment, none”.

The National Federation of Builders (NFB) is not entirely surprised at the failure of the starter homes programme. Since its inception in 2015, they have asked ministers and civil servants how we can deliver homes under this scheme, but have not received any response or support.

Whilst many might appreciate Malthouse’s clarification that the scheme is a failure and has built no homes in four years, the lack of transparency remains worrying and feeds into wider concerns that developers have with the Government and local authorities, who do not appreciate how damaging lack of certainty is to SME house builders.

The starter homes programme could have delivered some planning certainty, as it would have added work to local pipelines. But Malthouse’s admission explains why developers were not sure how they could get involved with starter homes.

Richard Beresford, chief executive of the NFB, said “This is bad news for the UK’s housing market and exposes the poor level of trust in relations between the Government and SME house builders. The Government must rethink how it should work with the wider industry, and not just a few volume house builders. It must figure out whether it really wants to build affordable homes or just win plaudits for acknowledging the problem and appearing to try.”

Rico Wojtulewicz, head of housing and planning policy for the House Builders Association (HBA), said “The Government has let SMEs down by promising a scheme that we were best suited to deliver but never engaging with us to deliver it. As refreshing as Malthouse’s honesty is, it comes too late particularly as starter homes were included in the most recent revision to planning policy.

“House builders are doing everything in their power to fix the housing crisis. It would be great if the Government shared our commitment.”

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