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Supply: Time to cut red tape

Tackling the shortfall in the supply of new homes in Wales requires action on planning, regulation and skills, says Mark Harris of the HBF.

Wales along with the rest of the UK is facing an acute housing crisis, a fact now accepted across the political spectrum and by experts and stakeholders across the sector.

A report for the Cambridge Centre for Housing and Planning Research estimated that from 2011- 2031 we need to provide between 8,700 – 12,000 homes a year. Output did rise slightly last year to 6,900 homes but this is still woefully short of what is needed and means we have already undersupplied at least 13,500 homes on that requirement.

The supply of new homes is affected by a number of factors including the availability of land, planning law, labour and materials availability. Land is supposed to be allocated for development by local councils in their housing plans. However, despite the Local Development Plan (LDP) system having been introduced in 2005 there are still a number of councils – including the Vale of Glamorgan, Swansea, Powys, Flintshire and Wrexham – who don’t have an up-to-date adopted plan. Further, 11 of the adopted plans are due to end in 2021, and so require reviewing.

Although these Local Development Plans allocate sites for housing, detailed planning permissions are still required before construction work can start, and the process of getting a permission through the system and to the stage when building can start is a lengthy one.

The recent Welsh Government White paper Resilient and Renewed Regional Working identified that between 2009/10 and 2016/17 resources devoted to the planning function declined by 53 per cent, the largest reduction of any local authority service area.

The Planning (Wales) Act 2015 has also amended the way in which applications over 10 houses are dealt with. These changes have added a number of extra steps to the planning process and, whilst they are designed to front load the system and result in a quicker decision, only time will tell if that is the case. As a result of the complexity of the planning system and the lack of resources it is not uncommon for an allocated site (one where the principle of residential development has already been agreed) to take in excess of three years to obtain detailed planning permission.

The availability of land for housing is monitored by Welsh Government through the Joint Housing Land Supply Study (JHLAS), which is carried out annually by each local planning authority (LPA) in conjunction with the HBF and other stakeholders. LPAs are required to maintain a five-year land supply. However, in 2016 only six LPAs had more than a five-year land supply, with four unable to carry out studies due to the lack of an adopted plan and four having less than two years’ supply. This lack of five-year land supply has resulted in a number of LPAs having to trigger an early review of their plan.

The 2008 downturn saw the industry shed around 40-50 per cent of its capacity. One of the biggest challenges it now faces as a result is how we recruit and train enough people to build the homes we need. Through the Home Building Skills Partnership we established last year there is a huge amount of work going on in this regard with the industry looking to recruit across the board, but there is no quick fix.

On the demand side Help to Buy Wales (HtBW) has proved to be a great success and a real life line for both buyers and as a result, the industry. The scheme enabled 4,619 buyers to purchase a new build home between January 2014 and December 2016, 785 of whom were first-time buyers – around 200 sales homes a month. HBF members report that HtBW accounts for at least 40 per cent of their sales. The extension of HtBW until 2021 was fully supported by the industry and the 6,000 units that the scheme aims to deliver are included in the 20,000 Welsh Government affordable housing target that it has set for this term of government.

However, barriers remain to the industry increasing output to meet this target. The current planning regulations and increased regulatory burdens in Wales mean it is a less attractive environment in which to build homes. Indeed they help make development in some areas simply not viable.

If we are to see more homes built in Wales we are urging the WG to consider the recommendations we made in a recent report (Increasing Investment In Housing Supply In Wales: HBF Recommendations To The Welsh Government, June 2016). It identifies policy areas with regards to cutting red tape and regulation that could make Wales a more attractive place to invest and build and so allow the industry to deliver the homes Wales desperately needs.

The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. HBF members account for some 80 per cent of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk.

Mark Harris is planning and policy advisor Wales for the Home Builders Federation

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