Boris Johnson’s “Build Build Build” announcement yesterday was designed to help drag the UK economy out of what could prove to be a steep recession, with a programme to spend billions of pounds on infrastructure to build back to prosperity.
In his speech, the prime minister confirmed his commitment to long-term investment in some of the country’s most deprived regions, arguing that balancing the books must wait until recovery is secure, but what impact will that have on the number of properties in the planning pipeline?
Government data shows that net housing additions pre-lockdown were not meeting demand, reflecting the fact that housebuilders were still not building enough new homes, contributing significantly to the affordability crisis and overcrowding in many parts of the UK.
To help fix the dysfunctional housing market and make properties more accessible, the Conservatives, in their election manifesto, promised to increase housebuilding levels by delivering an average of 300,000 new build homes a year by the mid-2020s.
But the election result has changed very little in terms of housing market fundamentals, with the market continuing to be plagued by a shortage of stock.
Affordability constraints in the sales market have driven more people to rent and that has placed upward pressure on rental values, and that trend is unlikely to change under the PM’s Build, Build, Build plans.
Heather Powell, property and construction partner at Blick Rothenberg, said: “Housebuilders and the ‘Bank of Mum and Dad’ appear to be the funders for new homes, not the government.
“The prime minister talked about building better, greener and faster but almost all of the funding announced was about infrastructure repairs, not new houses.”
She added: “He talked about Build, Build, Build but the announcement was about Repair, Repair, Repair.”
Like many areas of life, the severe lack of homes being built has understandably taken a back seat. However, it now stands as one of the pillars on which the government is forming its economic recovery plan.
Marc von Grundherr, director of lettings and estate agent Benham and Reeves, commented: “Hopefully, this added emphasis on such a burning issue will result in some action and this will be nothing but positive for the UK property market.
“Of course, there is always the danger that like many before him, the prime minister’s words will equate to little more than just that. With the UK property market still facing a very uncertain landscape, we certainly hope this isn’t the case.”