Planning consultancy Barton Willmore, has predicted that the coronavirus pandemic could cause annual housing completions to drop by around 94,000 homes by 2024/2025.
The analysis is predicted on comparable data from the 2008 global financial downturn. It suggests that the UK would see net new homes completed drop from 244,000 new homes in 2019/20, to 160,000 new homes in 2020/21. This decreased level would be maintained for four to five years while the economy strengthens and the housing sector rebounds.
The financial year 2023/24 would deliver the least amount of housing, at around 140,000 homes. The analysis notes that this amounts to a "major undersupply", considering the housing crisis that the Government has pledged to address by building 300,000 homes a year by mid-2020s. By 2029/2039, about 260,000 homes could be delivered annually.
Barton Willmore is calling for a number of changes to make sure the COVID-19 outbreak does not deepen the housing crisis. Mark Sitch, joint senior partner at the consultancy, said the Government should act to enable housebuilding, and support should be given to local authorities to help them address the housing shortfall challenges in their areas. He said: "This all points to the need for significant planning policy, akin to the 2012 National Planning Policy Framework following the last recession. Even if temporary, supporting measures are needed by Government to respond to this, to deliver the housing and economic growth needed across the country".
"For example, the reinforcement of the presumption in favour of sustainable development and the rebalancing of the weight being given to benefits versus harm. These policy changes should also be set alongside measures to improve the financial support for local authority planning departments, including the ring-fencing of pre-app and application fees to support their resourcing for decision and plan-making functions".
James Donagh, development economic director, added that the firm supports housebuilders wanting an extension to help-to-buy, but highlighted that this only tackles one area of the market. He suggests a help-to-buy scheme that supports all first-time buyers and downsizers.
"A significant proportion of homes purchased by first-time buyers are not new, and both these additions would stimulate a wider element of the housing market. Clear criteria, but with work and a reduced potential market of people capable of buying given the economic challenge we're all facing, this could be a well-directed response".
Responding to the analysis, Mike Derbyshire, head of planning at property consultancy Bidwells, noted that estimates of housing output slumping by 35% this year is troubling.
"The current crisis has snatched away the momentum which was gathering in UK housebuilding after the number of new homes hit a 11-year high last year. To pick up from where we left off post-crisis as best we can, the Government must now look to pull other policy levers rather than just fiscal support".
"There is work to be done in streamlining the planning system. The industry waits in anticipation of the housing secretary's soon-to-be published planning white paper, which is reportedly going to include a commitment to zonal planning as an alternative to the current land use planning system. I'm sure I speak for the whole industry in saying that this will be a fundamental and welcomed change which will help pick up the pace of development".
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