THE Government’s target of constructing 300,000 new homes by 2025 is doomed to failure because confidence is so low among house-builders, a leading property expert has warned.
Jonathan Rolande says Michael Gove has little chance of succeeding due to a “perfect storm” which is battering the housing market from all angles.
Mr Rolande, the spokesman for the National Association of Property Buyers, said: “In the last few months we’ve had a target of 300,000 new homes a year by 2025, then no targets, then Michael Gove was sacked and reinstated. Now the target is back on the table, it’s enough to make your head spin.
“Whilst Westminster has been busy tearing itself and the economy apart, and then trying to fix the harm it has done, the property market has entered a period of decline. The confidence of housebuilders is low, and we have serious inflation to deal with. Add in fact the cost of building materials is rocketing, price of bricks are up 12%, steel is up 50%, concrete has gone up 37% then it’s a nightmare scenario.
“Skilled labour is in short supply too and, since leaving the EU, it is now more difficult to ‘import’ it as needed. If borrowing money is a solution, that has also just become a lot more expensive.
“Mr Gove is widely seen as a fixer, somebody who can get things done. But even he will struggle with the perfect storm that is battering the housing and new-build market.”
On the 300,000 target, Mr Rolande, the co-founder of property firm House Buy Fast, continued: “It’s all very well having a 300,000 target but who will build them? I expect housebuilders to now focus only on developments where resales can be counted on and prices are less likely to drop during construction.
“This is likely to be prime property that will appeal to investment funds and overseas buyers. The volume of affordable and family housing built is very likely to reduce whatever the target set.
“Simply having a target, whilst useful, is not going to solve the housing crisis. We seem to have lurched from a period of prosperity to one of retraction within just a few months. It is a great pity that for the many years there was money to spend, the Government did not take the long-term view and embark on a homebuilding program itself.
“Some of the 200 billion plus currently paid every year in benefits would not have found its way into the pockets of private landlords and large corporations – instead it would have been saved, eventually paying for the construction of the property. If this had begun when the Conservatives came to power 12 years ago, we would now be sitting on a vast stockpile of property that would be, in the main, paid for. Unfortunately, being seen to go back on the flagship policy of selling off council homes means this did not happen despite the strong case for it.”
On what the future holds, Mr Rolande added: “So for now we must put our trust in private companies to build the homes we need and continue to pay billions in rent to the private sector which has stepped in and taken the long-term view on investing, where the government did not. The opportunity to invest in bricks and mortar is the ambition of most of us, but not, it seems, our own government.”
