Housing Futures
Housing Supply
John Stewart
HBF Director of Economic Affairs
17 July 2007
Housing Futures
Housing Supply
1. Plan-led System
2. Housing Land Supply
3. Housing Target
4. What is to be done?
1. Plan-led System
1. Plan-led System
Housing under-supply inevitable in planled system in market economy
• Politics
• Site drop outs
• Windfalls/brownfield
2. Housing Land Supply
‘Delivery’ Market Based
•
•
•
•
Housing ‘delivery’ depends on:
Land market – competitive price setting
Developer profitability (margin, ROCE)
Housing market – developers price takers
Supplemented by social house building
(but >50% ‘Affordable Housing’ via S106)
Sources of Increased ‘Delivery’
Three components of ‘net additions’:
• New homes (~90%)
More land with planning permission
and/or Higher densities
• More conversions
• Net of demolitions
180
170
160
150
140
Completions
Land area
2006
2005p
2004p
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
120
1990
130
1989
Completions (000)
190
7500
7000
6500
6000
5500
5000
4500
4000
3500
3000
Hectares
Housing Completions and Land Use, England
120
Completions
Average density
2006
2005p
2004p
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
Completions (000)
190
45
180
40
170
160
35
150
30
140
130
25
20
Dwellings per hectare
Housing Completions and Density, England
Completions (000)
135
125
115
105
95
85
75
65
55
45
35
Brow nfield
Greenfield
2006
2005p
2004p
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
Housing Completions, by Land Type, England
Resdiential Land, by Land Type, England
4.5
3.5
3.0
2.5
2.0
Brow nfield
Greenfield
2004p
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1.0
1990
1.5
1989
Hectares (000)
4.0
Land Banking
• House builder land banking – a myth,
beyond operational requirements
(Barker’s conclusion)
• Large stock of outstanding permissions?
Land Banking
HBF survey of 21 large house builders
5.1 years land in pipeline, of which:
• 47% (2.4 years) implementable permission
(of which 97% started within 3 months)
• 36% allocated or outline consent
• 17% not allocated & no consent
3. Housing Target
Housing Target: England
• 240,000 net additions per year by 2016
• 3 million additional homes by 2020
• New homes: quality, zero-carbon by 2016
Household growth: 223,000 pa 2004-26
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
1945
1940
1935
1930
1925
1920
Completions (000)
Total Housing Completions (GB)
450
400
350
300
250
200
150
100
50
-
HOUSING COMPLETIONS (ENGLAND)
400,000
350,000
Completions
300,000
250,000
200,000
150,000
100,000
50,000
1946 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002
Private
RSL
Public
120.0
Net additions
New completions
2004/05P
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1995/96
1994/95
1993/94
1992/93
1991/92
(000)
Net Additions to Housing Stock, England
180.0
170.0
160.0
150.0
140.0
130.0
Household Growth (England)
Average annual increase (000)
250
(000)
200
150
100
50
0
1951-61
1961-71
1971-81
1981-91
1991-01
2001-11
2011-21
Household Growth (England)
(000)
Average annual increase (000)
250
240
230
220
210
200
190
180
170
2001-06
2006-11
2011-16
2016-21
2021-26
2004-based Household Projections
Average annual growth, 2004-2026 (000)
North East
North West
Yorks & Humber
East Midlands
West Midlands
East
London
South East
South West
England
Source: CLG
Household Completions
growth
2006
7.5
7.7
25.4
18.4
23.9
15.2
20.5
16.9
18.6
14.8
26.6
21.6
39.4
20.3
34.4
27.0
26.9
18.2
223.3
160.0
Net Additions to Housing Stock, England
Indicative Trajectory
Assumes: 185,000 net additions in 2007, 240,000 in 2016, 3 million by 2020, 25,000 pa conversions-demolitions
250
240
230
(000)
220
210
200
190
180
170
160
150
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Net additions
Housing completions
4. What is to be done?
What is to be done?
•
•
•
•
Step-change in implementable residential
planning permissions
160,000 @ 40 per ha => 4000 ha
215,000 @ 40 per ha => 5375 ha (+34%)
215,000 @ 35 per ha => 6143 ha (+54%)
215,000 @ 30 per ha => 7167 ha (+79%)
Assumes: constant average site size; 25,000 pa conversions less demolitions
Central Government
• Policy, guidance, systems adequate
• Monitor system and outcomes
• Enforce/intervene – e.g. curb LA “interpretation”&
avoidance of proper process
• Adequate infrastructure funding & delivery
• Communities England role?
• Let markets work!
Regional Government
• Set adequate RSS housing targets
• Increase targets to hit 240,000 pa – early priority
• Cascade adequate targets down to LAs
Regional Assembly role to be curbed?
RDA role to be increased, RES driving?
RPG and RSS Housing Totals
Annual average net additions to the dwelling stock for plan period
Adopted RPG/RSS Proposed in Draft RSS
North East
6,000
6,580
North West
12,790
23,111
Yorkshire & the Humber
13,654
19,813
West Midlands
16,000
23,000
East Midlands
15,925
20,418
Eastern
20,850
26,830
South East
28,050
28,900
London
23,000
30,650
South West
20,200
23,060
England
156,469
202,362
Souces: Regional Assemblies, Panel Reports, Government Offices
Local Authorities
•
•
•
•
•
•
Accelerate LDD preparation
Set key policies in LDDs, not SPDs
SHLAAs* critical to delivery
Realistic brownfield and greenfield assumptions
Curb excessive cost demands on land values
Want to make it happen!
*Strategic Housing Land Availability Assessments
Industry
House building, supply, energy, finance industries:
• Skills and training
• Construction methods, innovation, delivery chain
• Materials and products (incl. Zero Carbon)
• Local renewable energy provision
• Finance
• House building industry capacity expand
• New home quality (design, product, satisfaction)
Housing Futures
Housing Supply
John Stewart
HBF Director of Economic Affairs
17 July 2007