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Positive start to 2019 for new home-building industry, reports NHBC

The number of new homes registered by the UK’s housebuilders and developers in the first three months of the year reached more than 37,500 – a 3 per cent increase on the same period in 2018.

37,672 new homes were registered to be built compared to 36,508 last year. The private sector was down by 6 per cent (26,841; 28,554 in 2018) with the affordable and rental sector up 36 per cent (10,831; 7,954 in 2018).

The overall increase, despite the ongoing Brexit uncertainty, is partly due to the low levels seen in the corresponding period 12 months ago when the ‘Beast from the East’ caused severe disruption on sites across the country.

The rise in the affordable and rental registration numbers reflects the continued growth in the Private Rental Sector in many UK towns and cities.

At a regional level London saw a 58 per cent increase compared to Q1 2018 (5,625; 3,549 in 2018), boosted by a number of large schemes being registered at the start of this year.

NHBC is the leading warranty and insurance provider for new homes in the UK and its registration statistics are a lead indicator for the new homes market.

NHBC chief executive Steve Wood said: “We are pleased to report good numbers for the start of the year, although we do need to bear in mind the situation 12 months ago when freezing conditions caused major hold-ups in registrations as well as build-rates across the bulk of the UK.

“Although Brexit uncertainties are impacting consumer confidence and causing some dampening of new-build and second-hand sale markets, housing remains an attractive asset class for inward investors, which does cause us to be more optimistic about Build to rent.

“At NHBC, we will continue to work with developers, builders and housing associations to help to improve the quality of new homes for the people who will live in them.”

Soruce: Scottish Construction Now

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Blueprint for around 8,000 new homes in Wrexham based on ‘outdated’ figures

Wrexham Council has been urged to revisit a blueprint suggesting sites for around 8,000 new homes amid claims the figures are ‘outdated’.

In November a majority of councillors backed the submission of the county’s Local Development Plan (LDP) to an independent inspector despite concerns about the scale of development.

A Plaid Cymru politician is now calling on the local authority to reconsider after new Welsh Government guidelines drastically reduced the expected amount of extra housing in North Wales in the next 20 years.

Regional guidelines published this week show a central estimate of around 1,600 homes will be needed across the six counties each year for the next five years, which will later reduce to 400.

It compares to an annual average of more than 500 homes outlined yearly for Wrexham alone in its LDP.

North Wales AM Llyr Gruffydd said he had questioned the previous population projections since he was elected in 2011 and is now challenging the need to build on green barrier sites.

He said: “In its draft LDP Wrexham Council claims it needs to build 517 new houses a year to meet demand.

“The new projections show that, across all six counties in the North, we’re looking at an average of 400 by the 2030s.

“Despite this, planning officers are still using the old projections to justify their claims.

“We’re in danger of being bounced into making decisions based on outdated figures.”

The draft LDP was submitted despite strong opposition in several communities and claims the blueprint was ‘fundamentally flawed’.

Most of the issues raised centred around the amount of homes proposed, as well as the potential location of three gypsy and traveller sites in Brymbo, Hanmer and Llay.

However, council leader Mark Pritchard urged politicians to back moving the plan forward.

He told them it was the only way for people in Wrexham to maintain influence over the proposals.

Wrexham Council has been asked to comment on the new Welsh Government housing need figures, but had not responded at the time of publication.

Source: Wrexham

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New Shrewsbury housing development could be on the way

Outline plans to build a housing development on land in Shrewsbury have been submitted.

Saxonby Homes has applied to Shropshire Council planners for outline permission to build 36 homes on land opposite Ellesmere Drive in Greenfields.

A design access statement prepared by Berry’s on behalf of Saxonby Homes said: “The site is located within an established residential area and within comfortable walking distance of Shrewsbury town centre and all of its associated facilities, services and employment opportunities.

“Future residents of the proposed development will therefore have ease of access to the full range of services and facilities.

“The site currently benefits from a vehicular access onto Ellesmere Road, where traffic is limited to 30mph. Nonetheless, it is proposed that the development will be served by a new access off Ellesmere Road. The scheme will provide 10 per cent affordable housing provision.

“The development site also benefits from a large pond on its western side and this may be utilised within the proposed development, providing an opportunity for valuable amenity space for residents.

“The locality within which the proposed development is sited is the Greenfields area of Shrewsbury. Primarily a residential area of older historic development of terraced dwellings built in the late 1800s-early 1900s and more modern dwellings at a lower density built in the mid to late 1900s.”

There has been a substantial amount of development in the area with a new housing development of 147 homes abutting the site.

Source: Shropshire Star

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Worst case no-deal Brexit could see 43,000 fewer UK construction jobs, report says

A no-deal Brexit could see up to 43,000 fewer construction jobs in the UK, according to an economic forecast commissioned by the mayor of London.

The research undertaken by analysts Cambridge Econmetrics has produced a damning report on the adverse effects a hard Brexit could have on the UK economy and various sectors. Sadiq Khan claims the study shows that a no-deal outcome could cost the country half a million jobs and £50bn in lost investment by 2030.

The findings also looked at London alone where increased housing numbers are desperately needed. Experts believe there could be 5,000 fewer jobs and a drop in output of up to £1.2bn by 2030 in the construction sector should the UK decide to walk away from a deal and leave both the EU customs union and single market.

Mayor of London, Sadiq Khan, said: “If the government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment. The analysis concludes that the harder the Brexit we end up with, the bigger the potential impact on jobs, growth and living standards.”

The analysis looks at the potential impact five different Brexit scenarios could have on nine key sectors of the economy. It shows that every Brexit outcome analysed would be bad for the British economy, but that the harder the Brexit, the more severe the consequences. The worst of the five scenarios postulates a departure in March 2019 with no deal or transition arrangements and researches have estimated this would lead to 482,000 fewer jobs across the entire UK and a loss of £46.8bn in investment by 2030.

“If the government continue to mishandle the negotiations we could be heading for a lost decade of lower growth and lower employment.”
Sadiq Khan, mayor of London.

James Murray, deputy mayor for housing and residential development, said: “This report lays bare the huge risks we would face as a result of Government’s failure to secure a Brexit deal that works for London and the rest of the UK. The fact the Mayor has had do the prime minister’s job in publishing the full impact of Brexit is truly damning. It shows the scale of the blow that a no-deal hard Brexit could have on our homebuilding efforts. London needs 13,000 additional construction workers to build the homes the capital needs – we simply cannot afford to lose skilled European labour.”

The research was commissioned after the Brexit secretary David Davis told MPs in December the government had failed to produce any economic forecasts on the likely impacts Brexit could have. Answering questions from the Brexit select committee, Davis also said no economic impact study had been undertaken before the cabinet decision to leave the customs union.

The Labour mayor was also a strong supporter of the remain campaign and has since argued for the UK to stay in the EU’s single market and customs union. Davis’s admissions in December have said to ignite a drive to produce some research-based evidence of future impacts. While the report’s authors have stressed the figures are reliant on a range of factors, it is the first time analysis like this had been undertaken to delve into the wider impacts of a no-deal Brexit.

Analysis by Melanie Leech, chief executive of the British Property Federation

Not knowing if we’ll have enough skilled workers to resource the construction industry over the coming years is deeply concerning.

We urge government to provide clarity on the status of EU workers as soon as possible – we are already seeing this uncertainty undermine regeneration up and down the country.

Government must get migration policy right if we wish to build much-needed homes and the physical environments capable of driving innovation, which underpin a successful post-Brexit UK.

Source: Infrastructure Intelligence

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28,000 homes plan could benefit Shropshire’s rural landowners, says expert

Paul Middleton said that although the housing figure would be quite a challenge to fulfil, it could prove to be a positive move for rural landowners.

The development forms part of Shropshire Council’s local plan review.

The council’s cabinet approved a consultation document last week, which will seek the views on the preferred scale and distribution of future developments across Shropshire.

The review includes building 28,750 homes across the county, while the consultation document also looks at employment growth.

The consultation period began last week and closes on December 22.

Mr Middleton, of rural surveyors and estate agents Roger Parry and Partners, said: “A housing figure of 28,750 across the county is quite a challenge to fulfil, that equates to a delivery rate of around 1,430 dwellings a year.

“It therefore follows there will need to be development in the rural areas to assist in meeting these targets, and this places great emphasis on the emerging Hierarchy of Settlements policy.”

The Hierarchy of Settlements document puts forward rural settlements that have gone through a screening process for size, population, service provision, internet links, transport links and employment opportunities.

Mr Middleton added: “If adopted, the Hierarchy of Settlements could provide opportunities for development that presently are not achievable, which is very positive indeed for rural landowners.

“We will of course be liaising closely with the council during the course of the consultation to ensure that our planning team are best placed to advise clients on the development opportunities, that will undoubtedly come to fruition in the future.”

The extra 10,347 houses are mostly planned for the towns in Shropshire, with 30 per cent planned for Shrewsbury, 24.5 per cent planned for the bigger towns such as Market Drayton, and Whitchurch, 18 per cent for smaller towns such as Much Wenlock and Bishop’s Castle, and 27.5 per cent for rural areas.

Ian Kilby, planning services manager, said: “In the recession there were about 800 houses built per year, and last year we had 1,910 delivered.

“It’s only a few years ago that next to no houses were being built.

“There was significantly more development last year than there was.”

But the council admitted that, as of this year, there were more than 11,000 cases where planning permission had been granted for homes where construction was yet to start.

Source: Shropshire Star

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More land needs to be released for new homes in the UK to meet demand

A rapid expansion of the house building industry has the UK on track to deliver the Government’s target of one million new homes by 2020, but more are needed, according to a new analysis.

Indeed, an additional 100,000 homes are needed each year if the new supply is to have any effect on housing affordability and to boost volumes and improve affordability more land needs to be released in the areas of greatest need, including green belt swaps, says the report from international real estate adviser Savills.

It explains that new homes volumes are up almost 50% on three years ago, meaning that new housing supply is almost meeting demand across most of the UK. However, London and South East regions are bearing the brunt of the shortfall, accounting for 104,000 of the 2015/2016 total, which puts great pressure on affordability. Only a fifth of households can afford to buy the average new home in these regions.

‘Policymakers must take this shortfall in the south east of England seriously if we are to finish the job of solving the housing crisis. Many more new homes are needed at price points that are affordable to the many, and across a range of tenures, if affordability pressures are to be eased,’ said Chris Buckle, director of Savills residential research.

New homes need to be priced as a mass market product to ensure high sales rates, the report says. Increased land release in areas of high housing demand would reduce competition for development sites, leading to lower land values and enabling new homes to be sold at lower price points.

If there were more land on the market, land owners may need to realign expectations on the value of land, Savills argues, though that value will still need to be high enough to persuade them to sell. For the policymaker, it means recognising that lower new homes values may result in less land value to be captured through CIL and section 106.

A commitment to solving the housing crisis is evident in the housing white paper, but to address the crisis where it is most acute will require a regional market led strategy for land release, including a programme of green belt swaps, the firm says.

The report also points out that Government aid, particularly in the form of Help to Buy, has helped boost the number of homes being built and will support around 20% of the 190,000 new homes expected to be built in 2016/2017, compared with 34,000 in 2015/2016 and 28,000 in 2014/2015.

Far the biggest increase has been in the number of homes being built without public funding, both market sale and built to rent units, up from only 62,000 in 2015 to an expected 111,000 this year, an increase of 79%.

The Savills report details evidence of high delivery sites in high demand areas across the South East. These include sites in Andover, Aylesbury and Bedfordshire where homes are priced at a discount of up to 15% compared to the local market on an average price per square foot basis. Each of these sites completed more than 600 new homes for sale in the past three years, a build-out rate significantly above average.

Even in high demand areas, such as Cambridge and Horsham, there are large numbers of homes being sold at a discount to market averages on a per square foot basis, the firm’s researchers found.

‘To build on this momentum, policy needs to go further, and our report contains some uncomfortable truths. Help to Buy may have helped boost housing delivery and given aspiring home owners a welcome leg up onto the market, but something more fundamental needs to be done to ensure we deliver more homes quickly, and at prices that more people can afford, whether to buy or to rent,’ said Buckle.

‘Policymakers need to recognise that high volume delivery of lower priced housing will limit the capacity of developers to fund infrastructure and affordable housing in the way they currently do, via section 106 and CIL payments, so other sources of funding for infrastructure and affordable housing will be essential,’ he added.

Developers will need to change their approach, Savills says, adding that the Government clearly wants to hold developers to account for new home delivery, through better, more transparent data and sharper tools to ensure housing with planning permission is built.

‘Although it is unclear what form these tools will take, this pressure, combined with the new housing delivery test for local authorities, means that it will not be enough for the development industry simply to maintain current modes of delivery,’ Buckle concluded.

Source: Property Wire