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Reposted by Neal Hudson

Neal Hudson @resi-analyst.bsky.social · 19d

As I wrote back in Feb, the government's focus on building homes with no apparent strategy beyond "planning reform" is dangerous and their ongoing failure to hit their stupid 1.5m target makes is more likely they'll be stuck with only the bad options to choose from.
builtplace.com/still-search...

The result of racing to meet the 1.5million target with no clear statement on what outcomes are desired comes with severe risks. It risks us ending up with a new build market that is focussed on delivering numbers as quickly as possible to the exclusion of all other metrics and is enabled by deregulation, tax cuts, and subsidies. That will inevitably lead to housing outcomes that compromise on quality, safety, environmental protections, and the needs of the actual residents. That doesn’t look like success to me, and it shouldn’t to this Government either.

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Neal Hudson @resi-analyst.bsky.social · 7d

But the previous government screwed HAs ability to perform that role this time around.

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Neal Hudson @resi-analyst.bsky.social · 7d

Data isn’t perfect but I’ve got s106 (incl partial grant) holding up after the GFC at least until post 2010 so even that’s not totally cyclical. But my broader point is that previous downturns have seen funding for the HA sector to maintain delivery - that’s how they really started in the 1990s.

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Neal Hudson @resi-analyst.bsky.social · 7d

I’m not sure they understand themselves. Last decade or so has seen the big London ones playing at being developers, buying land banks at the top of the market, and “re-inventing” HA finance. While at the same time ignoring their existing stock and residents except as an asset to borrow against.

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Neal Hudson @resi-analyst.bsky.social · 7d

Just on s106. It’s crazy that the gov hasn’t done more given their 1.5m aspiration. Delivering s106 affordable at the start of a development is a great way to lower risk in markets like this. Also highlights how we’ve compromised the HA sector - they were viewed as counter-cyclical for a reason.

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Neal Hudson @resi-analyst.bsky.social · 7d

Hearing that “build baby build” has not gone down well with the industry. The promise of yet more planning reform just creates more uncertainty (as does all the tax chatter). What they really want is Help to Buy v2 and HAs to take their s106 affordable off their hands.

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Neal Hudson @resi-analyst.bsky.social · 10d

MHCLG SoS in his “build baby build” cap at conference

MHCLG SoS Steve Reed wearing a red baseball cap reading “build baby build” at Labour conference. Screenshot from YouTube.

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Neal Hudson @resi-analyst.bsky.social · 10d

Scotland is also home to one of the king’s less mentioned forays into housebuilding: Knockroon

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Neal Hudson @resi-analyst.bsky.social · 10d

Housing is devolved so this is England only.

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Neal Hudson @resi-analyst.bsky.social · 10d

Was always going to be a mix of new places and “urban extensions”

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Neal Hudson @resi-analyst.bsky.social · 10d

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Neal Hudson @resi-analyst.bsky.social · 10d

Locations of proposed new towns

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Reposted by Neal Hudson

Matthew Pennycook MP @matthewpennycookmp.bsky.social · 10d

I’m immensely grateful to the New Towns Taskforce, under the expert leadership of its Chair, Sir Michael Lyons, and Deputy Chair, Dame Kate Barker, for producing such a considered and comprehensive set of final recommendations 👇🏻

www.gov.uk/government/p...

New Towns Taskforce: Report to government

The government has published the independent New Towns Taskforce report as well as its initial response to that report.

www.gov.uk

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Neal Hudson @resi-analyst.bsky.social · 11d

But apparently there’s been an order for “build baby build” hats for conference so I’m sure it will all work out ok!

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Neal Hudson @resi-analyst.bsky.social · 11d

Keep feeling the need to post this
bsky.app/profile/resi...

Neal Hudson @resi-analyst.bsky.social · 19d

As I wrote back in Feb, the government's focus on building homes with no apparent strategy beyond "planning reform" is dangerous and their ongoing failure to hit their stupid 1.5m target makes is more likely they'll be stuck with only the bad options to choose from.
builtplace.com/still-search...

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Neal Hudson @resi-analyst.bsky.social · 11d

None of the current outcomes in the house building market are a surprise to those of use who follow it closely.

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Neal Hudson @resi-analyst.bsky.social · 11d

That might’ve been the case pre 2022 but definitely isn’t the case now because there’s too little recognition of the demand and hence viability side challenges the market is facing from policy makers.

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Neal Hudson @resi-analyst.bsky.social · 11d

The challenge is they are two separate problems but it appears many have been sold the idea that planning reform is a quick fix to the challenges facing the market that would’ve helped Gov hit 1.5m in a parliament.

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Neal Hudson @resi-analyst.bsky.social · 11d

A point I made earlier in the year is that the government’s 1.5m target is stuck in a no-man’s land. It kinda looked achievable from where we were a couple of years ago but isn’t high enough to require a radical rethink about how we commission, fund and build new homes builtplace.com/still-search...

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Neal Hudson @resi-analyst.bsky.social · 11d

Which is what I said in the second line of my linked piece above. But what’s the point of fixing it for the long-term if we’ve compromised the industry in the short-term.

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Neal Hudson @resi-analyst.bsky.social · 11d

You only need a quick look at the industry lobbyists to see what they think the problem is right now (hint, they’re desperate for a new version of help to buy).
And it’s even clearer if you keep an eye on what’s actually happening in either the house building or city centre development markets

Neal Hudson @resi-analyst.bsky.social · 11d

We should’ve already seen the (previous) government step in and support the construction/housebuilding sector with a funding programme to convert market delivery into rental homes but they’d already screwed up the housing association sector who mostly managed that process the previous two downturns.

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Neal Hudson @resi-analyst.bsky.social · 11d

Not saying planning isn’t important but right now housebuilders and developers aren’t planning for new homes or building them because there’s a very limited number of people willing and able to buy them. Further planning reform isn’t going to change that.

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Neal Hudson @resi-analyst.bsky.social · 11d

They seem to think the problems are supply side and more planning reform will fix it but the most immediate problem is a lack of demand at current house prices and mortgage rates.

builtplace.com/market-comme...

Labour hit the ground running with their housing policies last year but the issue is they were trying to fix the wrong problem. They focussed on supply-side planning reforms that will be important over the longer-term but appeared to not realise that what we are actually facing is a more immediate crisis in demand. Just to be clear, that’s demand at current prices and interest rates. There remains significant unmet need for new homes and plenty of demand that is priced out by current high prices and rates. But the lack of any sizeable house price falls and the apparent recovery in the second-hand market over the last year or so appears to have blinded policy makers to the more immediate crisis – a shortfall in demand while development viability has also been squeezed. The result is a downturn in the new build market with delivery below recent highs and well below the levels the government requires to hit its 1.5 million target for this parliament. Unfortunately, it’s increasingly looking like it’s too late for any sensible policy reforms to have an impact on delivery in this political cycle.

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Neal Hudson @resi-analyst.bsky.social · 12d

As a result, it is useless as a leading indicator for net additions as clearly wrong.

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