Private Housebuilding: Opportunities

Despite the economic downturn, the Housebuilding sector still presents significant business opportunities.  The Government's housing strategy set out a package of reforms aimed at progressing and stabilising the housing market, surplus Government land continues to be identified for housing developments and housebuilders have begun to sign contracts with the Homes and Communities Agency under the £1.8 billion Affordable Homes Programme.

Housing Strategy for England to Address Housing Market Concerns

The Government's new Housing Strategy set out a series of reforms intended to stimulate the housing market, lay foundations for a more stable future housing market, improve environmental standards and support choice and quality for tenants through a mixture of new and existing initiatives:-

• Reformed Right to Buy proposal will see 100,000 homes sold, replacing each with a new affordable home.

• 100,000 95% mortgages to be provided under a new scheme launching in Spring 2012.

• £500 million infrastructure fund to support specific sites where lack of infrastructure is a barrier to development.

• A consultation will be issued in December 2011 detailing changes to Part L of Building Regulations (conservation of fuel and power) for 2013.

• A statement on allowable off-site solutions to achieve zero carbon new homes will be made alongside the 2012 Budget.

  Get Britain Building Fund to Unlock Stalled Sites

  Among the key immediate measures to increase housing supply announced in the Housing Strategy for England is the Get Britain Building Fund.  Under this initiative, up to £420 million will be available, intended to support building firms in need of development finance.

The scheme is aimed at unlocking stalled site with planning permission, providing deliverable projects capable of starting or re-staring on site as soon as possible in 2012, reaching completion by December 2014.  The minimum site size for these projects is 25 homes.

The Programme will operate by making direct investments in specific projects via loans or by taking an equity stake, building confidence through sharing risk.  The amount and type of funding offered to any project will reflect the Homes and Communities Agency's assessment of the minimum support needed for the project to proceed.

Current Affordable Housing Funding and Targets

The Affordable Housing Programme (AHP) forms an integral part of the Government’s intention to deliver over 150,000 new affordable homes during the 2011-2015 period.

• £1.8 Billion AHP Allocations will fund at least 80,000 new affordable homes, while £2.29 Billion will fund outstanding projects under the predecessor to the AHP, the 2008/09-2010/11 National Affordable Housing Programme.

• A total of 146 organisations make up the successful bidders announced in July 2011.  These bidders consist of Housing Associations, Local Authorities/ALMOs and Private Sector Partners.

• Approximately 27% of the total new homes will be built in the London area.

• Of the successful bidders, 15 are housebuilders.  These organisations have begun signing contracts, with further signings by the HCA to continue on a regular basis.

For further information on how Focal Research can help your organisation to target opportunities presented by the AHP, please contact us.

Planning Decisions on Surplus Public Land to Speed Up

In June 2011, the Housing Minister announced that the Government intends to release public land sufficient for the development of 100,000 new homes by 2015.  As part of this initiative, all Government Departments with landbanks are required to publish plans for the release of land to housebuilders by Autumn 2011. 53 sites have already been identified for disposal by the HCA, categorised as Strategic Development Sites, Sites for Market Sale or Non-Development Sites with those classed as development sites to be disposed of via the Delivery Partner Panel (detailed below), or through individual tenders.  A number of these site will also become available under the 'Build Now, Pay Later' scheme, an initiative that allows housebuilders to built on surplus Government land, paying only once construction has started.