Much has been made of the Government’s ambitious house building targets in recent years. As a means to alleviate the pressures on the housing market and bring an end to the housing crisis, the Government set the mark at 1 million new homes by 2020, and a further 500,000 by 2022 which equates to roughly 300,000 per year, however as we recently reported in this blog post the Government may not be on course to hit these targets after all.
Following the recent budget announcements, the OBR (Office for Budget Responsibility) forecasts that an additional 233,430 homes would be added to the housing stock for the period 2017/2018. While they anticipate that number would increase over the next five years, the average number of additional homes per year would be 249,282 - far below the numbers needed to meet expectations.
They also commented on the recent decision by the Government to scrap the cap on the amount of money council’s can borrow against their housing revenue in order to build more social housing. While the Government estimated this could be used to build around 15,000 new homes a year, the OBR believe it is more likely to be around 9,000 per year.
Richard Godmon, tax partner at Menzies LLP, believes that the recently announced £500 million housing infrastructure budget will have a positive effect on house building. The budget is designed to fund 650,000 new homes alongside a further £1 billion British Business Bank Guarantees to support the revival of small and medium sized builders.
He says “this is good news for SME house builders as they have been overlooked in the past and they have been finding it difficult to compete with larger scale developers to secure the upfront finance needed to get schemes underway”.
While additional funding for the housing industry may help to ensure the country is closer to the Government’s building targets, it cannot be denied that there are other factors that still stand in the way of the country meeting these targets. These factors include both a materials and skilled workers shortage which we could only see worsen after Brexit takes effect in 2019, and a potential shortage of suitable land being identified for development.
At Intro Crowd, we offer qualified investors the opportunity to invest in strategic land sites across the country. Strategic land refers to land that is greenfield in nature meaning it has no prior development and has been used for either agricultural or leisure activities, and is located close to an existing settlement.
Once these sites are fully funded, our experienced planning team takes them through the planning process, and if consent is granted, aims to sell them on to a house builder for residential development thereby increasing the provision of suitable land identified for housing each year.
For more information on anything mentioned in the article above, or to find out more about Intro Crowd and how you can get involved, contact us today on +44 (0)20 7118 4040 or email us at email@example.com
This article is for educational purposes only and does not constitute investment advice. This article does not amount to an invitation or inducement to buy or sell an investment nor does it solicit any such offer or invitation in any jurisdiction.
In all cases, readers should conduct their own investigation and analysis of the data in the article. Readers are strongly encouraged to seek independent legal and financial advice when considering an investment in strategic land. All statements of opinion and/or belief contained in this article and all views expressed and all projections, forecasts or statements relating to expectations regarding future events represent Intro Crowd’s own assessment and interpretation of information available as at the date of this article.
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