Post Election Update

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After the dust has settled… the planning and construction industries after the election:

Some things have certainly changed since the snap General Election on June 8. One of the major factors for the planning industry was the fact that Housing and Planning Minister Gavin Barwell lost his seat, as we predicted.

In his place is Alok Sharma, a chartered accountant with a background in corporate finance. Since becoming an MP, Sharma has been on both the Treasury Select Committee and the Science and Technology Select Committee, and has no background in housing. So, it will be interesting to see how he deals with the problem of housing delivery.

Maybe he’ll adopt a more favourable position as far as house builders are concerned – their common stance in respect to viability and the need to allow for a reduction in financial/developer contributions and affordable housing provision might well appeal to his accountancy background! Or will the opposite be true – with his financial background leading him to require housebuilders to crunch the numbers even more carefully before trying to argue such a position.

Pledge for more affordable housing

In the short term, however, it seems the provision of affordable housing will not be adversely affected, because the Department for Communities and Local Government (DCLG) has re-committed itself to building more of them, slowing the rise in housing costs, bringing down the price of renting, the diversification of housing supply, and delivering the previous pledge of one million new homes by 2020.

It’s expected that the new government will stick to their pre-election principles, which were set out in the February White Paper. The Queen’s Speech said: “We will deliver the reforms proposed in the White paper to increase transparency around the control of land, to free up more land for new homes in the right places, speed up build-out by encouraging modern methods of construction and diversify who builds homes in the country.”

And one would hope that Sharma’s previous position on the Science and Technology Select Committee will stand the construction industry in good stead. It has already been made clear – at a recent Chartered Institute of Housing conference – that the industry is at the centre of a skills crisis, which is only likely to be made worse by Brexit if EU nationals (and in particular the eastern Europeans who have been propping up the construction industry for many years) start to leave in droves, as has been suggested.

Residential approvals up

In the short term, Alok Sharma will be helped by the January-March 2017 figures, showing a 9% increase in residential approvals, compared with 2016. However, while this increase in planning permissions is encouraging, it does not automatically follow that they will be implemented quicker and increase the delivery of the much-needed housing.

There is more encouraging news from the Help to Buy scheme, however, with figures showing that it has helped 240,000 first time buyers onto the property ladder.

Remaining issues

So, there are still a number of issues affecting planning and construction and a variety of solutions are needed to help: we need more homes to increase supply and meet demand, but to also help with the need to slow house price rises and ensure they are more affordable. In the short term, this means having to maintain the increase in the supply of housing permissions and encourage more housing starts from developers, while making developments viable in order to meet the infrastructure and affordable housing needs of developments and communities. We also need to ensure that there is a workforce in place with the requisite skills, which may be one of the biggest stumbling blocks not just in the short term, but the long term, as well.

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