It’s time to get tough: housing charity Shelter demands government tackles developers who have failed to build thousands of homes. Here’s why.
What’s the latest?
Almost one-in-three homes approved in England over the past five years have STILL not been built, according to housing charity Shelter.
Its research shows that housebuilders have failed to construct more than 320,000 homes, despite them being given the official go-ahead.
Shelter says the problem is particularly acute in London where one-in-two so called 'phantom homes' remain unbuilt and only exist on paper.
Why is this happening?
According to Shelter, developers are failing to turn planned and approved homes into reality, purely to bolster their profits. It claims the current system housbuilding system encourages developers to, "sit on land and just drip out new homes, to keep prices high”.
The charity points out that, while in the past five years just 68% of planning permissions translated into completed homes, the UK's top five housebuilders saw profits “soar by an astronomical 388% to a total of £3.3 billion in 2016”.
Who does it affect?
Shelter says: “The cost of this undersupply has been borne by society as a whole, through lowered productivity, whole generations priced out of home ownership, rising homelessness and a very high housing benefit bill.”
First-time buyers are affected as they have to find more money for deposits, to get onto the property ladder in the wake of increasing house prices.
Shelter quotes the mum of a family-of-four admitting it broke her heart to realise her children would "never have a real family home of their own” after struggling, unsuccessfully, to save enough for a deposit after renting for 13 years.
And with too few homes being built, pressure is placed upon councils to allow urban expansion onto Britain's precious Green Belt land, to the consternation of environmental campaigners and those who wish to protect local agricultural sites.
What's Shelter's recommendation?
It has called for major reforms to the housebuilding market.
One suggestion is to bring in planning contracts, so developers are obliged to start building rather than sit on land – and planning approvals – for years on end.
“Housebuilders are trickling out a handful of poor quality homes at a snail’s pace, meaning there are simply not enough affordable homes, and ordinary working families are bearing the brunt,” said a spokesperson.
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Shelter is not alone in calling for political action, to turn the situation around.
At the Local Government Association’s (LGA) annual conference on 4 July, chairman Lord Porter said: “Our country is facing a housing crisis and the national shame of homelessness in on the rise again. For too long, governments of all colours have failed to tackle [the issue].”
Rather than target developers, however, he said that councils should be allowed to, “start building in a big way, if we are going to get serious about building more homes”.
The LGA said the UK’s housing supply increased by 190,000 new houses last year, “but the country needs to build 230,000 to 250,000 homes a year to keep up with demand.
What does the property sector say?
Given it is such a complex issue, there are a wide array of opinions on the best way forward.
The Home Builders Federation said that, according to its figures, 293,127 new homes were given the green light for building in 2016.
But, while housing supply is up 52% in the past three years, “we are still not delivering enough homes to adequately cater for our population, and the planning system remains one of the major constraints on supply”, the organisation said.
It has called upon councils to “speed up the rate at which builders get onto sites, and ensure they allocate sites that meet their local housing needs”.
Meanwhile, experts at the Royal Chartered Institute of Chartered Surveyors (RICS) point out that, with given the UK's increasingly unaffordable house prices, “the majority of British households will be relying on the rental sector in future”.
Yet, RICS believes the housing crisis, “will not be solved by building new homes alone – we must make use of our existing properties.
“We have repeatedly told Government that encouraging Britain’s ageing population to downsize could be the key to unlocking 2.6 million homes.
“Clearly, it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information, practical and financial support they need to downsize if that is their choice.”
What’s the situation in London?
The housing crisis has been keenly felt in the capital, where about 50,000 households live in temporary accommodation.
Local authorities in the capital have told politicians that the UK has not been building enough homes to properly house its population for ‘many years’ and this has a negative impact, particularly on the aspirations of young people.
Why is Britain's housing being discussed so much?
While property sector trends and statistics often hit the headlines, the housing market is particularly in the spotlight as a result of the government’s promise to fix it.
It has recently completed consultation on its Housing White Paper, ‘Fixing our broken housing market’.