BPF RESI 2019: Housing minister Kit Malthouse reaffirmed his commitment to the 300,000 homes a year government goal and called on the industry to “double-down” delivery, at the BPF residential conference 2019.
Malthouse said:”Whatever the weather over the next two or three months, we do hope you will double-down and expand your output.
“Whatever your view of Brexit, it’s vital that we all put our shoulders to the wheel.”
See also: BPF Resi 2019: Five key takeaways
He celebrated advancements in planning, funding and local government enabling, that should give the industry confidence and welcomed new ideas. But he added: “It’s a two-way street.”
In his keynote speech, Malthouse pointed to beautiful design to quash nimbyism, embracing modern methods of construction to accelerate delivery, and he took questions on the Letwin Review, the delayed Housing Delivery Test and complications surrounding land value capture.
Here are five main takeaways from his speech.
1. Housing delivery targets
Malthouse was steadfast on his housing delivery target of 300,000 new homes.
He said: “You all know that my mantra since I was appointed was more, better, faster. My job is to get us as an industry and as a country to 300,000 homes a year. And we’re doing pretty well so far.”
“It’s going to take a massive amount of work. It’s going to take enormous commitment, finance, planning, from councillors and developers, from the hod carrier right through to the chief executive of Landsec.”
Last year, the government saw 222,190 new homes delivered. BPF polls throughout the event found that in the morning some 18% of attendees believed that the 300,000 target was achievable, but this fell to just 4% in the run-up to the minister’s speech.
2. Housebuilding support
“The current environment is about the best we’ve ever seen, particularly for housebuilding,” said Malthouse.
Malthouse said demand is strong, land is available, credit is cheap and plentiful and planning reform has ensured certainty and direction, nimbyism is on the way out and the government is backing the sector like never before.
“All the stars are aligned,” he said, pointing to a budget of £45bn to spend on housing in the coming years – from Help to Buy to the Home Building Fund.
3. The delayed Housing Delivery Test
Due last November, the housing delivery test that measures local authorities against targets has yet to emerge.
“We’re definitely committed to it. I can’t pretend to you that there haven’t been capacity challenges in the department, but nevertheless we are finalising the numbers and they will be out shortly. Hopefully, for most local authorities it won’t come as a surprise.”
The Housing Delivery Test is a “key part of us rebalancing the planning system to make it less confrontational and more co-operative”.
The changes have seen local authorities given more directional powers in local plans, section 106, two-year planning permissions, and, in exchange they have obligations to deliver, said Malthouse.
4. Response to the Letwin review
Malthouse quoted Letwin’s findings on absorption rates. He said: “Part of the restraint on build-outs is the notion of market absorption and that if you vary what you’re providing you can create mini-markets.”
When asked if he intends to implement the changes, Malthouse said: “This is in consideration and discussion.”
He added: “The question that I posed internally is: given where we are in terms of the housing market, what kind of impact is this likely to have, were we to introduce it?” He said the department hopes to respond before the summer.
5. Land value capture
Malthouse said: “Nobody has yet presented us with an elasticity of supply curve, and nobody has really given us proper data on what we’re currently capturing.” Added complications arise from section 106, capital gains tax, market values and more complex factors, he said.
“Land doesn’t operate like a normal economic good.” He said land value varies from person to person, depending on invested emotion, nostalgia and family attachments. “It’s all about balance, and we are doing internal work to assess where on the supply curve we are.”
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