The chair of the Local Government Select Committee has accused developers of restricting the supply of new homes in an attempt to increase their profits…
Clive Betts, Labour MP and chair of the Local Government Select Committee, claims developers are failing to produce as many homes as they could to keep prices artificially high.
He criticised firms for “building at a rate to maximise their profits rather than address the country’s housing need”.
The accusation comes as figures reveal nearly half a million homes in England have planning permission in place but have not yet been built. Additionally, the length of time taken to complete a house has increased from 24 to 32 months.
Since 2010, the rates of planning permissions for new homes has increased by 60 per cent. There was also a 48 per cent increase in the number of new homes built.
Betts said the failure of housebuilders to speed up development was designed to maximise profits.
“I think it is clear that the big developers are building at a rate to maximise their profits rather than addressing the country’s housing need,” he said.
Some developments with permissions in place are not due to reach completion for another 10 years.
“These are private companies who are very simply trying to make money for their shareholders. They are restricting supply and the government urgently needs to come forward with measures to address this.”
Frustrations over the slow process of housebuilding in the country have been highlighted by Housing Minister Brandon Lewis. Last week, he told the local government committee, “When you have got housebuilders delivering, on average, 48 homes a year on some [large] sites that’s not good enough.
“We know they can go further. Housebuilders will talk about saturating the market. But we are aware that in too many places we are still taking 20 weeks to build a house when we can do it in three or four.”
New measures to speed up the development process are currently being discussed by ministers, who are concerned they will fall short of their commitment to build one million new homes by 2020. Proposals being discussed include forcing developers who buy publicly-owned land to commit to rapid construction as part of the planning process.
Recent figures from Glenigan (on behalf of the Local Government Association) revealed some 475,647 homes in England that had been granted planning permission remained unbuilt in 2014/15. This figure stood at 381,390 in 2012/13 and 443,265 in 2013/14.
A spokesman for the Home Builders Federation said the data showed an increase of 25 per cent to housing stock during 2014/15. A total of 170,690 new net additions were made.
He said: “The industry has delivered unprecedented increases in supply over the past two years driven predominantly by the large private sector housebuilders.
“This has been on the back of the pro development policies introduced in recent years and a general increase in demand.”
It is disappointing that those who have never operated in the commercial world speak without gathering the evidence. There are clear reasons why build out rates on individual sites tend to peak, its about the practicality of building. In terms of there being almost half a million sites with consent This is clearly nowhere near enough and is only two years worth of supply is we are to build 250,000 dwellings a year. Even at current rates of build it is under 5 years supply of consented and. More importantly not all of these sites will actually have detailed consent so that is another delay of possibly 1 to 2 years to get though the planning system. The evidence suggest that what would deliver faster rates is actually an increase in the outlets (sites).
This has been a problem for many,many years. Developers have restricted their supply to keep prices high. Supply and demand. They blame planning but at the end of the day it is down to them.
The government dont want to upset their backers so nothing gets done about it.
Duh! “I think it is clear that the big developers are building at a rate to maximise their profits rather than addressing the country’s housing need”. Yup – that’s their job. They are businessmen not philanthropists! If anyone thinks this is news, they need to get real. It’s the Government’s job to address need, and the developers’ job to make profits for their shareholders. Building houses just happens to be the way they do this & of course they will do it in such a way as to maximise profits. Expecting different is a fool’s game. Publicly-funded housing addresses need without the need to make a profit so is a far more efficient way of addressing the housing crisis than expecting developers to do it. Unfortunately the Government simply won’t step up to the challenge here as they are dead set against public ownership – and investment, come to that. Housing should be treated as infrastructure and funded accordingly. That’s the best way to maximise development, bring prices down, satisfy need and build long term public assets (bin RtB)that will pay back far into the future.