A new report is urging the government to impose a three-year freeze on new regulations to stimulate the housing market.
The report calls for a twin approach to increase viability and stimulate demand for new housing to meet the government’s stated aim of building 1.5m homes over five years.
Solving the Housing Crisis: A Plan to Make Homes More Affordable in Every Postcode was published yesterday (12 October) by the Prosper UK Housing Commission, a group of industry experts chaired by former conservative housing minister Gavin Barwell.
It claims that half the £76,000 rise in the cost of building a new home since 2020 comes from regulation, policy and tax.
Watering down biodiversity and nutrient regs
Its key recommendations on increasing the viability of housing schemes are:
- Water down current housing regulations such as the Future Homes Standard and on biodiversity and nutrient neutrality;
- Freeze new regulatory burdens on residential development for at least three years;
- Narrow section 106 to genuine, site-specific mitigation and restrict its use as a general funding mechanism for affordable housing, schools, healthcare or public services.
The report says: “The Future Homes Standard should therefore be reviewed and amended to ensure the requirements are proportionate and far greater focus relating to energy efficiency should be directed towards the existing stock, where both the environmental impact and therefore the environmental gains from action are far greater.”
Government must seek holistic approach
To encourage more demand for housing, the report calls for a pilot of community land auctions; a new shared equity scheme for first-time buyers; measures to speed up planning, including establishment of a new National Planning Service; and a review of the green belt.
Lord Barwell welcomed the government’s recent announcement of a new equity loan scheme for first-time buyers, but said the commission’s recommendations are not “pick n mix”.
He said: “Boosting demand without increasing supply will help a few people at the expense of everyone else, and tackling viability without tackling demand will make little difference. That is the view of the diverse group of industry experts who produced this report.”
The findings of the report are supported by the BCIS. Its chief economist Dr David Crosthwaite said: “The study reinforces a familiar concern – UK housebuilding is stuck in a rut, and unlikely to break free without policy or regulatory changes addressing both demand and supply-side constraints.
“If the government wants to stimulate activity, particularly in the private sector, it will have to make concessions somewhere.”
