Dev finance brokers don’t expect the government to meet its housebuilding targets
Less than one in 10 (8%) brokers working in property and asset finance expect the government to meet its one million new homes target by 2020, a United Trust Bank survey has found.
Three quarters of development finance brokers (74%) expect the industry to fall short of its housebuilding target.
Noel Meredith, executive director of United Trust Bank, said: “It’s quite worrying to see that according to the brokers who work closest to developers, the greatest obstacles to new business are the fundamental requirements of building new houses and apartments – somewhere to build homes and the permission from the planners to do so.
“A short supply of suitable green and brownfield sites will not only hamper the industry’s ability to deliver the government’s one million new homes target by 2020, but it will also add to house price inflation with approved development sites fetching increasingly inflated prices which will inevitably be reflected in higher asking prices for the finished products or reduced profit margins for developers.
“There’s plenty of land in the UK suitable for development but the pressures from multiple stakeholders such as local residents fearing change and conservationists concerned with the environmental impact often mean that viable opportunities are abandoned early on.
“It remains to be seen whether the government’s commitment to freeing up development land will make any material difference to what is currently a dysfunctional system.”
The key barriers to SME housebuilders, according to brokers, are the ability to source good land and redevelopment opportunities (40%) and problems/delays with the planning process (38%).