Tackling the housing crisis - we need to change the system

Solving the housing crisis is still one of the biggest challenges facing the UK. The debate is as varied and diverse as the issue itself, and certainly this years’ RESI conference was no different.

"We need a new plan to unshackle the housing market."

The figures make stark reading. We need to build more than 300,000 homes a year to have any impact on affordability, but the fact that the UK has only just hit the 200,000 a year mark shows just how far we still have to go.

Planning permissions may well be on the up, but unfortunately we’re still seeing major housing shortfalls in the areas of greatest demand. While planning reforms could go some way towards addressing the situation, we still need to think more in terms of ‘place making’. It’s not just about building more houses. We need to consider how we create jobs and communities in these areas.

Building Homes and Creating Communities

The current consultation on the Government’s “Planning for the Right Homes, in the Right Places” proposal makes interesting reading but, the fact is, the housing system is fundamentally flawed and does not meet the needs of a changing population. We need a complete overhaul of how we approach delivery, not just in the here-and-now, but a re-thinking that encompasses the next 20-years and beyond.

In creating new homes in new locations, we need to consider the role of new strategic and social infrastructure. In ten years, 25% of households will be over 65 years old. Homes need to be future-proofed and we need to ensure that community benefits are better realised through place making. 

As Arcadis’ recent report “Building Homes - Making Places” showed, the economic benefit of building just one home outstrips the cost of construction by a ratio of 2:1. In real terms, this means that every new home built in the UK has the potential to generate over £316,000 in wider benefits for the economy, UK businesses and local people. We need to make sure we are better harnessing this potential. 

Political and Economic Uncertainty 

The topic of political and economic uncertainty reared its head again at RESI, and there’s no escaping the impact this is having on our sector. With market sentiment so fragile and volatile, we could see two more years of subdued activity. 

More encouragingly, the Build to Rent market continues to gain momentum. Both Build to Rent and Housing Associations will be major players over the coming years and could have a big role in supporting the industry. If they are to succeed though – particularly Build to Rent – then we need a better viability model. Build to Rent, as a model, needs to be more developable and investable if it’s going to attract the necessary level of funding.

Ultimately, we need better collaboration and more collaborative working models. Sharing resources between the public and private sector, such as labour, technology or the supply chain, will ease some of the pressure.

Unfortunately there are no quick and easy solutions. The scale of the housing crisis is so deep and has become so entrenched that we need to make some drastic changes to the way we operate. No one working in our industry would dispute this, and the positive tone at RESI showed that there is a willingness to embrace the changes necessary. The over-reliance for new unit numbers on the traditional housebuilding model aimed at short-term returns will not create any change.

We need a plan that encompasses new players to the market, a more diverse product, greater customer choice and increased collaboration between the government and the private sector to unshackle the housing market.  

James Knight

Head of Residential Ask me a question