Out-Law / Your Daily Need-To-Know

Housebuilders claim building targets cannot be met

Out-Law News | 27 May 2014 | 3:08 pm |

94% of housebuilders consider the Home Builders Federation target of 200,000 new homes per year to be unachievable, according to a survey by real estate consultancy Knight Frank.

The survey found that most developers expect construction of new homes to rise in both the short and medium term. 75% believed that development volumes between now and 2020 would be boosted by the extension of the Help to Buy scheme.

The annual target of 200,000 new homes was widely seen as unrealistic. Only 6% of respondents to the survey considered the target to be regularly deliverable, and 30% considered 180,000 to be the maximum number achievable in current market conditions.

“Consistency of housing policy is fundamental to boosting supply as well as expanding access to public sector land", said Knight Frank head of UK research Grainne Gilmore according to the Estates Gazette. "It is likely that the confidence engendered by the government intervening in the housing market via the Help to Buy scheme has had a bigger effect on prices than the scheme itself."

“Next year’s general election throws up some uncertainty about Help to Buy. Labour have not commented on their intentions around the equity loan, although they too have criticised the mortgage guarantee. Also, finding a suitable unwinding mechanism for the equity loan will be paramount in the coming years if a ‘cliff edge’ market distortion is to be avoided in six years’ time”, Gilmore said.