What does the affordable homes crisis mean to property developers?

18/07/2018 07:56

It has recently been reported that the affordable home crisis in Ireland has reached breaking point. Some have even speculated that it’s ‘the social issue of our time’ but the sad reality is that the lack of affordable homes isn’t just affecting Ireland; it’s a widespread issue throughout the UK.

 


What has caused such a crisis?

 

Recent reports on the UK government’s housing plan between 2015-2020 suggest that almost every target set has been missed thus far, leading some to believe that “by 2020 homeownership will be an 'impossible dream' for those not already on the ladder”. It has been estimated that the need for housing in England alone is currently two to three times higher than  the current supply.

 

It is thought that the current ‘dysfunctional’ housing market is a direct result of local governments stepping away from the building of new houses, leaving the responsibility in the hands of not-for-profit organisations, which are struggling to provide thanks to a reduction of the capital subsidy.

 


What is needed?

 

The country is in need of 200,000 to 300,000 new properties - a margin not seen since the 1970s - which presents a demand for property developers to step in, though some doubt whether building more homes will provide a solution. Property developers face a challenge due to constraints in the planning system, as well as a shortage of available land. Many areas employ strong policies to protect green spaces, which have been highly effective in preventing urban sprawl and, in light of other social challenges, such as climate change and food security, it seems impossible to find a one-size-fits-all solution.

 


Can the crisis be solved?

 

However, a solution must come. London Mayor Sadiq Khan is looking to increase the supply of lower-cost homes and has assured property developers that private development proposals that have at least 35% affordable units will be fast tracked through the process by the capital’s council. Whether this scheme will prove effective, or be adopted by other councils throughout the UK is still very much up for debate, but the effects on property developers would be both positive and negative. For developers willing to offer affordable housing, it looks like their schemes will be more strongly favoured by councils, but with some developers unwilling or unable to offer such proposals, it’s clear a compromise will have to be reached somewhere along the line. 

We aim to deliver much needed capital to start-ups and SMEs

Call Now +44 (0) 203 2909019

#DigitalMarketing