Building the future - Can Wales overcome its sluggish housebuilding record?

At these times of stark political differences, the need for Britain to build more homes is one of the few things the country's major parties are agreed upon.

"We have not built enough homes in this country for generations," the Conservative Party lamented in its manifesto for the 2017 election.

Labour struck a similar note in its proposals, asserting: "Britain has a housing crisis – a crisis of supply and a crisis of affordability."

Meanwhile, the Liberal Democrats noted the "…far-reaching consequences of a shortage of decent housing on economic growth, labour market mobility, education, and social mobility…"

But if there is a rare political consensus on the need to build more homes, the best means of adding to Britain's existing housing stock is subject to more typical political point-scoring.

In such a febrile atmosphere, a dispassionate view of the challenges and obstacles to delivering more homes is invaluable – and a recent forum hosted by planning and development consultancy Lichfields in Cardiff allowed real estate professionals just such an opportunity.

If anything, the firm's experts said, the crisis in housing is even more pronounced in Wales – noting that there has been a "stark difference" in the strength of recovery of the housebuilding sector in Wales following the 2007-2008 financial crisis when compared to neighbouring England.

While England has staged a full recovery and the latest figures show the annual number of completed new homes has returned to 99.5 per cent of pre-recession levels, that figure for Wales remains stubbornly lower at just 66 per cent.

Lichfields was at pains to note that the reasons for this discrepancy, and for the sluggish pace of delivery of new homes in Wales generally, were "complex", taking in everything from planning policy to workforce skill levels.

Fortunately, industry leaders were told, Wales – and the country's South Wales economic heartland in particular – currently has a perhaps unprecedented range of policy levers with which to revolutionise its approach to housebuilding.

The Welsh Government has commenced work on a Strategic Development Plan (SDP) which it is hoped will give a coherence to land supply and housebuilding across a number of the country's local authorities which has previously been missing.

Additionally, the £1.2 billion City Deal for Cardiff promises sizeable investment into public infrastructure including a new South Wales Metro which it is hoped will help to create 25,000 new jobs and unlock the economic potential of deprived areas on the periphery of the capital.

Little wonder Vicky Robinson, Vale of Glamorgan Council's operational manager for planning and building control told the Cardiff audience that across South Wales there are "quite a lot of busy policy teams at the moment".

Key to the success of what may emerge from the region's planners will be avoiding previous pitfalls – what Lichfields' Gareth Williams described succinctly as "making sure the next round of plans are perhaps more effective than the last lot of plans".

At the start of 2019, the Welsh Government released its estimates for the country's housing need over the next 20 years. Their research estimates that Wales will have to deliver 8,294 homes per year for the next five years. 

The ambition of that target becomes all the more clear when figures show that Wales has delivered an average of 6,000 homes per year for the last decade.

The latest central estimates will inform the development of the SDP – but Stephanie Irvine, senior planner at Lichfields, cautioned against adhering too closely to these figures.

She told delegates: "The Welsh government has stated that these estimates shouldn't be applied as targets – but we have got no assurance that they won't be. So the question is – do these estimates provide an appropriate basis for the housing future or are they simply reflections of what happened in the past?"

Her concern is that estimates are often based on data from a particular period – such as the sluggish years of growth immediately following the financial crisis – which can then be a bad fit when circumstances subsequently evolve. Not only this, but the devil is in the detail when it comes to the methodology of such forecasts.

"A young couple living with their parents will only be included [in the data] as a concealed household if that house is overcrowded. So unless they are sleeping on the sofa, that won't count as a concealed household," she explained.

If planners stick rigidly to the latest estimates of housing need from the Welsh Government, she added, by 2038 there could be an increase of 113,000 people aged 65-plus and a reduction of almost 23,000 people aged 16 to 64 – the key workforce demographic.

"This would be completely out of step with the aspirations of the City Deal," she added.

In order to deliver on the promise of a renewed commitment to housebuilding by Wales' various stakeholders, the Lichfields senior planner believes flexibility will be key – with an increased role for direct public funding of affordable housing augmented by a more welcoming environment for commercial development, and an increase in the contributions to the public purse the Section 106 agreements for such schemes would provide.

"There is a need for aspiration, and to move away from these past trends if we want different outcomes in future," she said. 

Insight article bySteve Morris

Steve Morris

Partner

+44 (0)7717 681 737
[email protected]

 

Insight article byMark Summers

Mark Summers

Solicitor

+44 (0)7790 551 223
[email protected]