Garden Party – New towns and starter homes
Russell Quirk takes a look at the two latest housing announcements - garden villages and starter homes - and what they mean for UK homeowners.
January 6, 2017
My champagne bucket is dusted off and ready. And I have a ten-year-old bottle of House of Commons bubbly signed by David Cameron ready to be unleashed.
So what occasion might justify such celebration at eMoov Towers?
It’s only a few days into 2017 and already we have not one, but two major housing announcements by Theresa May’s government.
On Monday, we heard that the Department for Communities and Local Government was to support the construction of 14 new Garden Villages across the UK which will include between 1,500 and 10,000 new homes each. Additionally, there are to be three new Garden Towns to complement the four that were announced a while back, and which will conspire to provide around 200,000 new homes. 25,000 of these will be commenced by 2020, not that far away, all things considered.
The next day the Housing Minister, Gavin Barwell MP, announced 30 local authority areas will receive £1.2bn in funding to facilitate ‘thousands of new starter homes’ and that will be sold at a 20% subsidy to buyers between the ages of 23 and 40 on properties priced up to £250,000 (£450,000 in London).
Now, I have been a thorny critic of the current and of previous administrations on the subject of housing supply, as this country has punched below its weight in building sufficient housing since the mid-1980’s. Back then, we’d manage to construct over 200,000 homes per annum and that was sufficient for the population of the time.
Now? Now, we build 150,000 or so each year but with demand requiring 250,000 units, a massive shortfall and a deficit for sure. Nothing short of a crisis in my view.
We have heard many, many announcements of peripheral funding for housing in recent years by Prime Ministers (especially David Cameron) and Chancellors (especially George Osborne) but which, once the headlines subside, have yielded little if anything in the way of pragmatic spades in the ground so to speak.
Govt money in itself is actually less important than:
- Identifying specific land for development
- Releasing publicly owned land for housing, largely ignored by Whitehall and local councils up until now
- Expediting the planning process
- Persuading (read pressuring) big developers to actually build more than their shareholders might like in order to promote greater profits
And so it may well be, thanks to the Housing and Planning Bill that the then Housing Minister Brandon Lewis, pushed through Parliament last year, we are now, at last, finally seeing practical steps applied, instead of financial ‘fluff’ and rhetoric.
Last year saw a slight upturn in housing completions at circa 180,000 but still way off the 250,000 needed. This week’s news fills me with some confidence that we’ll at least get past the 200,000 new builds per year in the medium term now, although the planned homes still need to get past a bureaucratic, protracted and NIMBY riddled planning process before they’ll see the light of day.
Notwithstanding the possibility of such a ‘democratic inconvenience’, edging up past that magic 200,000 threshold and on towards constructionutopia will assist in regularising house prices, especially in the overheated South East, and provide a chance for our future generations (yes, our kids and their kids) to stand a chance of affording their own home in decades hence.
Otherwise, and if the NIMBYS get their way, our grandchildren will only be able to resort to reading books about their ancestors fulfilling the dream of homeownership aspiration rather than experiencing such dizzy heights themselves.
You think champagne is a rare and unjustifiably expensive luxury? If building provision is not tackled with more (much more) of what we have seen this week, homeownership may eventually be as out of reach as a Melchizedek of Krug with a hand-painted label by Salvador Dali.
Written by Russell Quirk, eMoov CEO
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