Supply issues will cause rapid price rises
A straw poll conducted at the HSBC Great British Housing Debate found that 80% of delegates believed house prices would continue to rise at 5%, while only 20% of the audience believed it would continue to rise at a lower rate.
Patrick Law, corporate affairs director of Barratt PLC, asked a panel of experts how the government could improve housing supply and build the 250,000 homes a year that are needed to meet demand.
David Smith, economics editor, Sunday Times, said that planning constraints and the reduced size of the building industry were the “major constraints” of meeting this quota.
He said: “We can’t just expect the building industry to increase its capacity by such a degree. With demand at its current degree the industry will not be able to meet demand.”
And David Newnes, executive director, LSL Property Services, also found issue with the government, stating that the current length of planning permission applications was a significant factor in preventing the required supply rate from being realised.
Nigel Terrington, chief executive, Paragon, warned that there was no “quick fix” for the nations building woes.
Terrington said: “We are talking about a restructuring of the building industry that is 30-40 years in the making.
“We need a stable housing minister to oversee this structural change so that an increased supply of this size can be realised.”
Both the panel and audience were unanimous in calling for a long term strategy from the government to resolve the issue.