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25/06/2018

Lack of housing type variety driving slow build-out rate, says Letwin

Words: Laura Edgar
Constuction apprentices / Shutterstock_303640871

A review of housebuilding in England has found a number of reasons for a slow build-out rate of developments, including that developers releasing a limited number of homes for sale at any one time slows down the current system.

The review also notes a lack of variety in the types of homes being built.

The government commissioned Sir Oliver Letwin to lead a review into what could be done to speed up the slow rate of house building on major sites, which was initially announced in the 2017 Autumn Budget.

Staggering the release of new built homes tends to prevent prices being driven down in the local market and is known as the absorption rate.

Since his interim letter sent to the government in March, Letwin says he has heard further evidence that has done nothing to alter his view that “the homogeneity of the types and tenures of the homes on offer in these sites, and the limits on the rate at which the market will absorb such homogenous products, are the fundamental drivers of the slow rate of build out”.

He suggests that if developers offered housing of varying types design and tenures (and “distinct settings, landscapes and street-scapes") on large sites and the variety matched the desires of people who want to live in the area of proposed development, “then the overall absorption rates – and hence the overall build-out rates – could be substantially accelerated”.

Letwin’s research also considers the construction industry, noting that there will be a “significant biting constraint” if build-out rates increase on large sites, alongside other government measures, as the country looks to deliver on the government’s target to deliver 300,000 homes a year.

In order to meet the target, 15,000 extra bricklayers will be required.

Without a move away from brick-built homes or to bring in expertise from abroad, the government and major housebuilders “must work together (specifically without current training providers) on a five-year ‘flash’ programme of pure on-the-job training”.

Letwin urged the government to consider measures to “rapidly” increase the number of bricklayers.

Richard Blyth, head of policy and research at the RTPI, said: “The RTPI welcomes the publication of the draft analysis by the Letwin review of build-out. In particular, we would support the conclusion that a much greater variety of tenure and of types of home is needed on large sites and agree with the review that simply turning from large sites to small sites would not increase build-out rates. The RTPI has indicated to the government that the proposals in the NPPF regarding small sites are not sufficiently flexible to be effective. Large sites are important in ensuring infrastructure provision.

“We have been saying this in our #16Ways campaign to solve the housing crisis and our work on getting councils building shows one way in which variety could be achieved. The RTPI is working with the Right to Build Task Force on increasing the variety of tenures through custom/self-build.”

The report also includes evidence on other potential constraints to build-out rates, including a lack of transport infrastructure, difficulties of land remediation, delayed installation by utility companies, and limited supplies of building materials.

Independent Review of Built Out Rates: Draft Analysis can be found on the UK Government website (pdf).


Read more:

Autumn Budget 2017: Stamp duty abolished for first-time buyers; garden towns; £15bn extra for housing market

Panel to review barriers to building announced

Spring Statement 2018: Hammond backs West Midlands to build 215,000 homes in 10 years

The Letwin report into build-out rates: An interim view


Image credit | Shutterstock

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