Growing the number of new homes

EDP Prop 07.07.17 Joe Pattinson Newbury Column

EDP Prop 07.07.17 Joe Pattinson Newbury Column - Credit: Archant

Election manifestos for (nearly) all parties claimed that they would build more houses in the years running up to 2020. I would love to think of a politician picking up a trowel and laying a few bricks but perhaps their skills lay elsewhere.

In 2016 the top six house builders; Barratt, Persimmon, Taylor Wimpey, Bellway, Redrow and Bovis built 45% of the 140,660 new homes completed in the UK.

The late Sir Lawrie Barratt started in 1962 and floated his company on the stock exchange in 1968 and by the 1970s was building 10,000 houses a year. Steve Morgan founded Redrow in 1974, floated on the stock exchange in 1994 and by 2006 had built and sold 50,000 homes. Tony Pidgley CBE, left school at 15, sold his first company at 19 and went on to start Berkeley Homes in 1975. The company regularly builds between 3,000 and 4,000 homes a year, mostly in London. Tony Pidgley is considered to be a pioneer amongst property developers and is currently investing in modular homes, which will be essential as labour shortages grow and construction costs continue to rapidly escalate.

It may be an unpopular truth but it is visionary entrepreneurs who build houses and if we want to increase the number of new homes they will need to be encouraged. The concerns of national house builders, regional and local builders about the tortuous planning process are well known. What is perhaps not quite so well recognised is that high street banks, who not unsurprisingly, are concerned about another banking crisis and are now much more cautious in their lending to developers. This makes the sort of growth created by Sir Lawrie Barratt, Steve Morgan and Tony Pidgley more difficult to replicate. This caution is imposed by The Bank of England put this together with George Osborne's usurious rates of Stamp Duty imposed in 2015 and this all goes to restrict housing growth as London prices are set to fall by 3% this year.

We are still 100,000 new homes a year short of what even the most conservative of commentators believe is needed to get house price inflation anywhere near under control. If all builders increased production by 10% year on year it would take until 2023 to get to 250,000 by which time the target will no doubt have moved on.

At Newbury New Homes we have come a long way in a short time and will be completing more than 139 new homes this year and expect to be doubling that over the next couple of years. We are already looking for our next sites in and around Norfolk and if you can help us to find them then please give us a call.

This column is sponsored by Newbury New Homes

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Joe Pattinson