Described by the Prime Minister as “a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation,” the recent housing and planning package can only be welcomed by the industry. But has it gone far enough?

The Government intends that the measures will assist developers, businesses and first-time buyers. They include:

  • A £280m extension of the FirstBuy scheme to March 2014, helping 16,500 first-time buyers
  • Removing affordable housing restrictions from housebuilders who can prove that they make a scheme commercially unviable, to unlock 75,000 homes
  • £300m capital funding to provide up to 15,000 affordable homes and bring 5,000 empty homes back into use
  • A new Bill for Government guarantees – up to £40bn worth of major infrastructure projects and £10bn of new homes. The Infrastructure (Financial Assistance) Bill will guarantee the debt of housing associations and private sector developers
  • An additional 5,000 homes built for rent at market rates in line with proposals outlined in Sir Adrian Montague’s report to Government on boosting the private rented sector
  • 1000’s of big commercial and residential applications to be fast tracked. Where councils are acting poorly, developers can opt to have their decision taken by the Planning Inspectorate
  • Putting the worst performing town hall planning departments into “special measures” and allowing developers to bypass councils. More applications to go into a fast track appeal process
  • Temporarily relaxing planning rules for extending homes and businesses.

The Deputy Prime Minister described the package as a “boost that will get Britain building again.” More cautiously, Roger Humber, strategic policy adviser to the House Builders Association, said “this will not lead to a surge in immediate housebuilding, and will take time to work through.” Similarly, Liz Pearce, BPF Chief Executive, warned that they will only solve housing issues if accompanied by a significant package of other measures.

At the same time as the measures were announced, Local Government Association (LGA) research was released showing nearly 400,000 plots where planning permission had been granted. It estimates that at the current rate of construction, this equates to about three and a quarter years housing stock on construction, ready to be built. “These figures conclusively prove that local authorities are overwhelmingly saying “yes” to new development and should finally lay to rest the myth that the lack of new homes being built is the fault of the planning system”, said LGS chairman Sir Merrick Cockell.

But as John Stewart, Director of Economic Affairs at the Homes Builders Federation pointed out; “Housebuilders have to have a stock of land to enable them to plan their businesses. It takes time to build and sell the homes on a housing development, so house builders inevitably hold stocks of land under development. Housing is a long and complex process and builders need to have an adequate supply of land in the pipeline to responsibly manage materials and people. Until we have a more certain and efficient planning system, house builders will need to hold land stocks of three years or more.”

Sir Merrick Cockell concedes that the stimulus must come from elsewhere; “To get Britain building again we need to address the lack of liquidity in the finance market and tackle the shortage of mortgages for struggling first time buyers” he said.

Robin Grove, Partner in Speechly Bircham’s Housebuilding and Regeneration group agreed, “the Government has clearly tried hard here to come up with measures to improve viability. However, before we can get too excited, the lack of available funding both for development and mortgage loans still remains a major issue."