_Solving the UK's housing shortage: Key barriers and solutions
The white paper examines the fundamental barriers to housebuilding growth, with guidance on how to resolve them. Plus, it highlights issues relating to the planning system, land supply, funding, development incentives, supply chain, environmental requirements and affordability.
We are delighted to have contributed towards this white paper. Justin Gaze, Head of Residential Development Land, and Anna Ward, Associate in our residential research team, supported the publication with their data-driven insights and expert knowledge.
Anna also participated in a panel discussion hosted by Brickflow, discussing some of the themes within the report, plus challenges and opportunities for the new government when in place.
What are the barriers to housebuilding?
The white paper covers an extensive range of barriers, from environmental factors to affordability. Here, we wanted to highlight some of the key areas we focus on at Knight Frank.
Planning
Authorities are often slow to adopt local plans or don’t have an up-to-date plan. The Home Builder’s Federation (HBF) reports that delays in the planning and development process are the biggest obstacle to building new homes, causing the number of SME housebuilders to fall by 80% since the early 90s. Key triggers include local plans taking too long to adopt, inconsistency in planning decisions, a protracted developer contribution process and a lack of digital tools.
During the panel discussion, Anna highlighted: “I think the other thing that’s very important is to reduce the planning risk that we’re currently seeing in the market at the moment. You’ve got developers who want to bring land forward for development, but the issue is the planning risk that they face. The new government needs to focus on reducing that planning risk.”
Key ways to overcome planning barriers include improving infrastructure delivery, reforming developer contribution, and creating or increasing developer incentives for affordable housing.
In the report, Justin commented: “To get support for a development, it’s vital to show money from the Infrastructure Levy will be used to cover the increase in demand for services locally, such as road use, doctors’ surgeries, etc. It’s dangerous to divert the money to areas remote from the development itself.”
Land supply
In England, over 90% of the land is of non-developed use, with agriculture (63.1%), forestry, open land and water (20.1%), and residential gardens (4.9%) being the top 3. As land supply is limited and fixed, more transparency is needed.
In our Q4 2022 survey of volume and SME housebuilders, we found that 85% of respondents said land availability was limited/very limited, and the economic/market outlook has caused land buyers to be more selective.
Green belt
The green belt covers nearly 13% of England. The government’s policy is to prevent urban sprawl by keeping land permanently open and maintaining a clear physical distinction between town and country. Contributors to the white paper argue that green belt areas should be evaluated comprehensively to identify land that could be used for housing development to form part of a solution.
During the panel discussion, Anna added: “Inevitably, we are going to have to start building on some greenbelt land. I think that is important and is now at the forefront of political debates.”
In the white paper, Justin commented: “A lot of green belt land is low quality, and if we want sustainable developments, we should take a small element of green belt land, close to infrastructure hubs, and develop there. This is one of the best solutions to the land supply issue and more sustainable than putting in new infrastructure and building around it.”
Land costs
The 2022 research briefing from the UK government says land price is a barrier to housebuilding, and high land prices reduce the quality and size of new homes.
Justin says, “A better solution is to de-risk the planning process and make it cheaper, with less expensive reports produced. It’s currently politicised at a local level, creating uncertainty.”
10-step recommendations framework
The white paper provides a robust 10-step framework of recommendations on resolving the barriers and support building across the UK. These are as follows:
- Increase funding for planning departments with immediate effect
- Provide clarity around household projection data
- Introduce a database for public sector land and audit green belt land
- Focus the use of the Infrastructure Levy on supporting local communities and infrastructure
- Improve government and private sector funding for developers
- Implement a robust energy and water infrastructure strategy
- Increase buyer affordability
- Build market confidence in Modern Methods of Construction
- Invest in technology to facilitate more building, buying and selling
- Adopt a culture of collaboration and action
You can read the full report on the Brickflow website and watch the complete panel discussion below.
How can we support you?
We work with the UK’s top new home developers to market and deliver the leading new developments and development land throughout the UK. Get in touch with our Residential Development land team.