With the housing crisis continuing to dominate the UK, international real estate adviser Savills has released a report emphasising the need for releasing more land for housing.
To boost volumes and improve affordability requires more land to be released in the areas of greatest need, including green belt swaps, but innovative ways of funding affordable housing will be needed together with investment in infrastructure, said Savills, in a new report, ‘On track to solving the housing crisis?’
Rapid expansion of the housebuilding industry puts the UK on track to deliver the Government’s target of one million new homes by 2020, but an additional 100,000 homes are needed each year if the new supply is to have any effect on housing affordability.
New homes volumes are up almost 50 per cent on three years ago, meaning that new housing supply is almost meeting demand across most of the UK. London and Southeast regions are bearing the brunt of the shortfall – accounting for 104,000 of the 2015/16 total – which puts excessive pressure on affordability. Only a fifth of households can afford to buy the average new home in these regions.
According to Savills, increased land release in areas of high housing demand would reduce competition for development sites, leading to lower land values and enabling new homes to be sold at lower price points.
“Many more new homes are needed at price points that are affordable to the many, and across a range of tenures, if affordability pressures are to be eased,” says Chris Buckle, director, Savills residential research.