While painting a better-than-expected picture of the country’s housebuilding landscape, the latest one from Knight Frank still serves as a stark reminder that there are inherent problems.
The firm’s annual housebuilding report – a snapshot of views from more than 100 housebuilders and developers – shows that the majority (86%) think the construction of 250,000 new homes a year is the maximum they’d be able to achieve by 2022, falling some way short of the government’s target of 300,000.
Just 1% of respondents said they thought the 300,000 target – outlined by chancellor Philip Hammond in last year’s Budget – was do-able.
The government’s ambition is no doubt impressive, but the message from housebuilders is stark: we simply can’t build as many homes as you’d like us to.
And this is a problem when it’s clear the country simply isn’t building as many homes as it needs to be doing.
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The reasons are myriad and – it should be said – there is no silver bullet, no unique remedy to make all the issues disappear.
But one of the stumbling blocks has got to be access to finance, particularly for SME housebuilders and developers. It’s borne out in research from the Federation of Master Builders showing over half of smaller housebuilders (54%) saying that getting finance is a major barrier to them building more homes.
Why? In my view, the mainstream lending market – the one occupied by the big household names – is flat, inflexible and lacking dynamism. While the property market is evolving with new names arriving on the stage, I believe traditional banks have yet to wake up, being wary about lending large amounts to smaller-scale developers.
This is locking out a whole swathe of developers who desperately want to do what they exist to do: build.
One of the answers lies in the hands of challenger banks and specialist lenders. With more progressive thinking, flexible approaches and out-of-the-box products, these organisations are perfectly positioned to kick-start housebuilding in the UK.
Three hundred thousand homes a year? Let’s aim high.