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Housebuilders' struggle with nimbys and planning authorities

By Ray Edwards

A new home will make you greener

Hold your nerve and you could soon be flying high on the crest of a wave. John Elliott, managing director of Millwood Designer Homes looks to the future.

Last year proved to be rather a level one for residential sales prices, but when you consider everything that has happened over the past few years, this comes as more of a relief than a worry. However, this year seems to be the year for much-needed change in the property industry.

I have made myself very clear in the past over my concerns about the state of the housing industry and the crisis that we are facing regarding the chronic shortage of new houses.

We need to be building more, that much is clear, but housebuilders like ourselves are struggling not only against concerned nimby groups that for some reason think that the National Planning Policy Framework, will actually allow housebuilders to build over greenbelt, which it won’t, but also the continual battle we have with the planning authorities to build anything at all! Planning permissions indicate the future levels of housebuilding.

It is worrying to find that they are down 42% in the last five years, going from 33,624 in 2006/7 to the current figure of just 17,683 approvals last year. Housebuilding in the South East has plummeted by around 37% over the past six years from 30,410 starts in 2005/6 to just 19,060 in 2010/11, while official government projections reveal that the number of households in the area is expected to increase by 39,480 annually – twice the current housebuilding level.

The New Homes Bonus, which started in the financial year of 2011/12, is an incentive for housebuilding. Local authorities that grant consent for new homes are able to receive the bonus from central government for every new home that is completed ready for occupation.

If enough homes in the South East were built to meet household projections, the local authorities would receive around £135m extra funding (from the New Homes Bonus) every year and see more than 30,000 local jobs created. This may sound promising but there is already speculation about the effectiveness of this new scheme. It will be interesting to see whether planning permissions do dramatically increase over the next year.

Despite the lack of new homes, the property market is still moving forward and a renewed confidence has meant that house prices have made their biggest leap for 10 years.

Some argue that this has been affected by the flurry of first-time buyers that rushed to beat the deadline at the end March for the stamp duty holiday, so it will be interesting to see what happens over the next few months.

According to Nationwide, UK house prices rose by just 1% in the last year, attributed to the uncertain economic outlook that had restricted activity among buyers. However, when you add to this a weakening government and low wage growth, not to mention financial problems across the rest of the EU and, in fact, the world, then UK house prices actually proved to be highly resilient in 2011. So although it is a small growth, it is still a positive sign against the bigger picture.

Since the financial crisis began, lenders have demanded deposits worth up to 25% of the value of the property locking many out of the market, especially first-time buyers. This has resulted in a collapse in the number of transactions – and a chronic shortage of housebuilding.

One step in the right direction is NewBuy, the mortgage indemnity scheme that was developed by the Home Builders Federation and Council of Mortgage Lenders. The scheme will mean that as many as 100,000 buyers will be able to use a 95% mortgage to get a foot on, or take their next step up, the property ladder. It will provide a boost to building and will see 50,000 jobs created.

The future of our housing crisis lies not just on how many homes we can build but how many we can sell.

It is pointless building more homes if people are unable to buy them and so it is the lack of mortgage availability that is still holding the market back.

There are many people that can afford the mortgages, they just don’t have the huge deposits needed, so this new mortgage indemnity scheme should give a new lease of life to the New Homes industry and a much-needed change of direction. All eyes will be on 2012 to see how it unfolds.

Millwood has a range of properties throughout Kent. For more information about any of the developments, call 01732 770991 or visit the company website at www.millwooddesignerhomes.co.uk

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