The UK government recently announced changes to planning laws to 'turbocharge' the building of 1.5M new homes over the next five years.
The gist of these changes are that central government is going to have more power to over-ride local council plans where local councils fail to plan to meet nationally appointed local targets.
One slight carrot is that local councils are allowed to use 'grey belt' land, or land on the green belt which has previously been built on.
But will more houses be built, and if so will it be for need or just profit..?
Labour is working on the theory that it's planning failures which explain why too few houses are being built, rather than other factors, such as basic economics.
Even if local councils rapidly approve new land for house building this doesn't mean house builders will take the bait....
Local councils are required to plan for a certain amount affordable housing, and the problem with this is that it's less profitable.
Depending on how each councils put forward their plans constructors may just cherry pick those developments will less allocated affordable housing, and bid for developments with more luxury homes.
According to MorningStar there are a shortage of construction workers too which could make building progress tight.
Then there is also the issue of the housing affordability index, and yes that is actually a thing... it's currently sitting at a ratio of 8-1 median housing cost to median income, and that's down from a peak of 9-1 since 2021, but with high interest rates this still means the cost of housing is LESS affordable now than ever.
This of course puts downward pressure on demand which eats into the profit potential for developers.
More radical social housing solutions required...?
We may well have a need for more housing but I just can't help feeling these new planning measures just aren't enough... I just can't see profit-seeking house builders coming through.
Just thinking on my feet here maybe what we need is something radical.... like the government guarantees a mortgage on self-build plots and then pays X percent of someone's salary for a year while they build their own house...?
I.E. cut out the middle men in construction and empower individuals to build their own...?
Sort of like enforced decentralisation.
Posted Using InLeo Alpha