'Beating the offsite rule' - RICS Property Journal, June 2013
- Date: 11/06/2013
Philip Santo looks at the UK’s housing shortage and describes a ground-breaking new scheme that will boost mortgage lending on innovative forms of house construction.
February’s Offsite Housing Review, compiled for UK government by the Construction Industry Council (CIC) revealed a broad level of agreement among experts that the housing shortfall in England is likely to get worse and confirmed the view of the Future Homes Commission by Sir John Banham in 2011 that in the region of 300,000 units are needed every year to avoid a serious stock deficit by 2030.
The report makes a number of striking observations. One of the most interesting, perhaps obvious on reflection, is that the housebuilding industry is very clear that it exists to make money for its shareholders and not to further government policies for housing or sustainability. While the industry would certainly like to be in a position to build more homes, provided there is demand to sustain sales and maintain current profit margins, they will not build at a higher rate than their local markets can absorb. This explains why volume builders are content to build out their sites with completions running typically at one per week with no interest in increasing their speed of construction.
Even given the opportunity to resource an expanded programme, the private sales sector of the housebuilding industry would only ever aspire to deliver around 140,000 new homes a year, well below the 240,000 currently targeted by the government and far short of levels needed to meet anticipated long-term demand.
"...RICS has worked with Buildoffsite, Lloyd’s Register and Building LifePlans in consultation with the Council of Mortgage Lenders and the Building Societies Association to develop a scheme to provide assurance to the lending community that innovatively constructed properties will be sufficiently durable to be readily saleable for a minimum of 60 years."