Innovation 'key to meeting nation's housing needs', conference told

Innovation in the housebuilding sector will be key to meeting the nation's housing needs in an uncertain financial climate, a panel of industry experts told today's Planning for Housing conference in London.

Melanie Leech, chief executive at industry group the British Property Federation, speaking at the Planning for Housing conference this morning
Melanie Leech, chief executive at industry group the British Property Federation, speaking at the Planning for Housing conference this morning

Melanie Leech, chief executive at industry group the British Property Federation, cited the build-to-rent sector and modular construction as major opportunities for creating new homes at scale.

The nation currently has 132,000 build-to-rent homes under construction or going through the planning process and almost nine per cent of new homes last year came through this route, Leech said.

"The sector is bringing new investors and investment into housing. It's not just driving existing models of provision harder," Leech told the conference. "This growth has been brought forward without national policy support. It has come of age in the new National Planning Policy Framework, with its requirements for local planning authorities to include build to rent in their housing targets".

Brendan Sarssfield, chief executive at social housing provider Peabody, said the housebuilding industry has a "systemic" problem in developing new techniques and models for how it goes about its operations compared to other sectors.

"Under our financial models, land costs absorb all the money and there's none left for innovation. We need to find ways to invest more in research and development," Sarsfield said.

Craig McWilliam, chief executive at real estate firm Grosvenor Britain & Ireland, told the conference that housing delivery is a key challenge for civic leaders. "Government has acknowledged the need for more housing despite potential uncertainties, including the end of Help to Buy and the prospect of increased interest rates in the medium term," he said.

"As an industry, we face growing calls to explain our value to society in financial and social terms. We have to do more to meet public aspirations for wider benefits from development," said McWilliam.

"The starting point has to be public sector leadership, to create greater confidence of private sector investment at scale. We have to get better at explaining our purposes and our point of view, and engage better with communities."

The conference was also told that developers should consider stockpiling construction materials in case of a no-deal Brexit.

Sara Parkinson senior planning manager at developer Galliford Try Partnerships, said there was a "concern that with a no-deal Brexit on the horizon, the economic outlook for housing and delivery is becoming increasingly challenging and in some circumstances quite bleak".

The key challenge from a delivery and construction perspective is the availability of materials, Parkinson said. "The import and export of materials post-March 2019 will be a huge challenge," she said.

"As members of the single market and customs union, we have been subject to ‘just in time' process which consists of a frictionless border and very light touch arrangements about VAT and tariffs," she said.

"Beyond March 2019 it is unclear what is going to happen, but I expect to see increased taxes and tariffs as a result of the changes to customs union arrangements."

The changes, Parkinson predicted, would lead to a shortage of materials and "cause delays to construction projects across the board - including roads, schools and homes".

Galliford Try, Parkinson said, had "already started stockpiling materials in warehouses in London and we will continue to look for more warehouses to store materials". 

This, she said, was "to ensure projects in the pipeline will be able to be built on time and with minimal delays". She advised others to think about materials needed for construction and to consider stockpiling them in case of a no-deal Brexit.

Parkinson also said that the recent reforms to planning policy on viability - whereby existing use value plus a premium is set as the basis for assessments - "doesn’t provide any incentive" for landowners to sell their land, which would make it more difficult to deliver housing in London.

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