It came to light recently that a senior Treasury official accused housebuilders of purposely building slowly and restricting the supply of new homes to keep prices unnecessarily high. However, I believe that it is a number of other factors, namely the planning process and large housebuilders, who are responsible for this resistance in building.
The senior Official suggested that housebuilders attempted to hold onto land for as long as possible, and then build just a few houses on that land in order to maximise profit. He added that large housebuilders tend to buy land simply to trade instead of to build on. He suggested that housing supply needed to be pushed "faster down the pipe."
Clearly these allegations are serious and should be investigated, especially with the demand for housing ever increasing. However, in my experience at Wedgewood Homes, it is government legislation that often sticks a spanner in the works in terms of speed of homes being built, not builders.
When it comes to gaining planning permission on land, it can often be a very lengthy process - sometimes taking years to obtain. An NHBC survey found that 33% of housebuilders identified this as their biggest barrier to building. This is well known by the government and it appears that steps are going to be taken to reform this, as mentioned in George Osborne's recent Budget Statement in March. For example, there are aims to reduce delays caused by planning conditions, as well as lessening the number of stages developers have to go thorough to gain permission. I will be interested to see when these initiatives will be put into practice, and how effective these changes will be.
Another problem facing smaller housebuilders is the strong hold that large housbuilders have on the market. Time and again, small and medium sized companies lose out on land and building opportunities in favour of larger ones. This is also something that the government's aware of, and are reported to have said that they would "love" to stop large housebuilders' stranglehold on the market.
At Wedgewood, our Longview development in Boughton-Under-Blean utilises space to its full potential, consisting of seven, 3-bedroom homes. We want to continue to supply affordable homes and gain more land, but with the aforementioned barriers, it is hard to see how we could deliver at a faster pace than we currently are. We are ever hopeful that the new initiatives will be put into place soon, and will have a positive effect on the property industry.