Britain finally has an improving economy, one that is set to remain in this trend for the foreseeable future. The housing sector, however, will need more houses built to remain financially secure.
Although the government has pledged another 200,000 homes a year, Britain hasn’t had growth like that since 2007, with the sector slowing over the financial crisis that followed. In addition, some fear the figure is still not enough; housing charity Shelter estimates that 250,000 more homes per year are needed.
The private sector is hampered by red tape when it comes to construction that to date have prevented optimum new properties being built. Many in the industry believe that the construction of 200,000 new homes is unlikely without change, with the planning system and opposition to building cited as common obstacles.
However, the government say the simpler National Planning Policy Framework introduced in 2010 is effective, the amount of granted planning permissions growing year on year: 158,000 in 2011 to 240,000 in 2014.
Another factor is lack of land. Although this slows building, greater demand causes property prices to hike. One potential solution would be to make greenbelt land available for construction, but this could prove unpopular in some regions.
Among the ideas to encourage construction are radical options, such as taxing land banks, though this has been widely condemned.
Significant policy changes are needed to reach the 200,000 new home target. Whilst first-time buyers may be caught in the surge of demand for affordable housing, this is better news for landlords and those buying to let, with property set to maintain or increase in value.