Bristol Planning Law & Policy Conference · Bristol Planning Law & Policy Conference November 2016...
Transcript of Bristol Planning Law & Policy Conference · Bristol Planning Law & Policy Conference November 2016...
Bristol Planning Law & Policy Conference
November 2016
“The House Builder – a practical response
Jennie Daly
UK Land & Planning Director
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Topics for discussion
• What makes a home builder tick!
• Government policy direction & initiatives
• Capacity of the home builders
• Myth busting:
• Lets talk about Land-banking?
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What makes a home builder tick?
Home building – a business like any other ?
A business which is successful by being:
• Sustainable in the short, medium and long term
and
• Profitable
• With responsibility to our customers, shareholders and employees
• Working within policy environment
• Revenue generation• Improved Return on Capital Employed• A secure pipeline of raw materials
For the home builder all of the above are sensitive to:• Location• Planning Constraints• Volume• Price
Sustainability achieved by:
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Monitoring the fundamentals:
• Population projections
• Household formation projections – no. of new homes required
• Housing Supply
• Mortgage affordability (multiples of combined salary)
• Mortgage affordability especially for FTB
Other drivers include:-
• Disposable income
• House price inflation indices
• Land price as a % of gross development value
• Build cost movements
• Overall inflation - RPI
• Interest rates movements
Managing the cycle?
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Government policy direction &initiatives
Post War Housing Completions
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DCLG Live Tables
Planning & Regulatory changes?
Recent announcements…
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• A package of measures announced at the Conservative Party Conference 2016 :
• Homebuilders Fund & Infrastructure Fund - £3billion
• £1bn short term loan funding for SMEs
• £2bn for infrastructure funding to bring forward development
• Accelerated Construction Fund - £2billion
• Use of public land and different models to attract new entrants
• Urban regeneration
• Promoting brownfield development
• Also:
• Direct commissioning to support Accelerated Construction Fund
• Modern Methods of Construction (MMC)
…& more to come
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• Autumn Statement – 23rd November 2016
• Housing White Paper
• Secondary legislation required for much of the Housing and Planning Act
• Clarify the future of Starter Homes
• CIL review outcomes
• LPEG review outcomes
• Future of PRS policy
• Affordable housing and revitalised RSL sector
• More on MMC
Capacity of the home builders
Capacity of the homebuilders?• How far can the Majors expand?
• The role of SMEs
• New entrants?
• Housing association capacity
• Other home builders (e.g. Build to Rent )
How has the sector performed?
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Materially improved output…
Circa 171,000 net new additions to housing stock in year to April 2015 (England)
Overall output has increased up to a third in two years & was up 20% in 2014/15
The Major Home Builders have increased output by circa 60% since their low points
Sector predicted to deliver in excess of 180,000 net new additions when reported in November 2016
BUT;
Government is seeking still more output from private sector and RSLs
Renewed focus on increased delivery starting to re-emerge:
Use it or lose it
Planning delivery rate
SoS seeking market “Disrupters”
Constraints on Production
Source: Housing Market Report17
Change in the number of SME home builders
Source: NHBC18
19Source: NHBC Quarterly statistics
Land Banking !
Oh no, not this again…
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Barker Review 2004
Calcutt Review 2007
Office of Fair Trading 2008
What is a land bank?
Achieving implementable planning consent
Delivery & Absorption rate
Resourcing in the industry
Resourcing in LPAs
Land availability
…and all this in a cyclical market
Home Builders Volume Commitment
• Building frustration and pressure from Ministers for the industry to increase supply throughout 2015 and early 2016.
• Driven by–
• Perception of homebuilders overly benefiting from Government initiatives such as Help to Buy,
• Government’s target for 1 million new homes and ,
• Local Government pressure regarding inability to maintain a 5 year housing land supply despite their perception of issuing permissions.
• HBF Majors Commitment published on 11th May 2016:
• Build out at speed
• HBF’s larger members have committed to go conduct reviews of all large sites to see where build out rates can be increased further
• HBF will report back to Government on the initial outcomes of these reviews
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• Local need
• Improve the accuracy of the five year housing supply process
• Commit to increasing transparency around build out rates on a site by site basis by providing annual returns to local authorities on actual and projected build out rates of current and future sites making future decisions better informed
• Local authorities, members of the community, and the Government will monitor the delivery records of individual builders and the roles of other key stakeholders in ensuring homes are built at a suitable rate
• Support for small builders
• Increase access by small builders to developable sites
• HBF to set up a Land Exchange service which will enable house builders to advertise or purchase sites, including phases of large sites
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