These are exciting times for those in the construction industry and the importance of the small and medium sized house builder should not be underestimated.
“Our landmark Housing and Planning Act will increase housing supply alongside home ownership building on the biggest house building program since the 1970s. The Act will contribute towards achieving our ambition of delivering 1 million new homes”
Brandon Lewis, Housing and Planning Minister
On 12 May 2016 the Housing and Planning Act received Royal Assent. Government believes that the Act sets out a clear determination to keep the country building and provide families the opportunity to buy their own home.
The level of private new housing has been increasing gradually since early 2013 and in the quarter January – March 2016 it was at the highest since records began in 1997 at £6.3 billion.
However, in spite of this impressive statistic, demand for housing is still far exceeding the level of supply which presents a fantastic opportunity for house builders to ‘make hay whilst the sun shines’. This discrepancy between supply and demand for residential property is also expected to keep house prices reasonably high for the next five years.
Even prior to this legislation, January to March 2016 saw an increase of 4.8% in total new housing output compared with October to December 2015. When compared with the same period a year ago, there was an increase of 3.4% in total housing with private housing increasing by 7.5% offset by a fall in public new housing of 14.3%.
Although the final Act is yet to be published, it is widely believed that the new legislation will be greatly welcomed by smaller house builders, especially as they will be granted further exemptions from regulatory requirements.
Further, the Queen’s speech on 18 May 2016 promised:
- A £2.3 billion funding package to support the building of 60,000 starter homes by 2020.
- The prospective launch of a £3 billion Home Building Fund of which £1 billion is to support smaller developments and custom builds.
- £10 billion is pledged by the Government through a Housing Guarantee Scheme to support the delivery of new affordable homes and purpose built private rented homes.
“My Government will support aspiration and home ownership through its commitment to build a million new homes”
Queen Elizabeth II, 18 May 2016
Disclaimer
The information was correct at time of publishing but may now be out of date.
