A Knight Frank report on house building has highlighted the returning confidence to the construction sector, which has recently seen a flurry in construction activity.
The 2013 house-building report shows that around 65% of respondents expect the number of new homes to rise this year, with 25% expecting a significant uplift; a confidence reflected in recent figures posted by the sector, with housing approvals increasing by 37,000 in Q2 2013, when compared to the same period last year, allowing for the total housing approvals for the 12 months through June to reach 156,608.
It is also considerable to note that the overall proportion expecting a slight or significant rise in housing completions rose from 69% before the budget to 75% afterwards, signalling the positivity surrounding recent government initiatives including Help to Buy.
Housing approvals increased by 37,000 in Q2 2013, when compared to the same period last year
Although Help to Buy has made a significant indent on the recently poor-performing construction sector, with buyers having reserved 5,000 new homes since the scheme was launched, a number of other government initiatives were also cited in the report as impacting the hike in confidence from the sector.
The most influential of these is the National Planning Policy Framework; under this policy local authorities are required to produce a local plan and identify sites which can produce five years’ worth of housing, against their housing requirements. In places where a local plan is not available, the NPPF states that ‘presumption in favour of development’ should be adopted if other criteria such as environmental sustainability are met. Since this framework has been adopted, the number of developments given planning on appeal has surged, indicated by the rising confidence from the construction sector, with nearly half of respondents reporting that the number of schemes granted planning after appeal had risen.
Another policy which has triggered positive reactions has been the government’s pledge to release enough public sector land to enable the construction of an extra 1,000 homes, with 54% of Britain’s estimated 61,920 hectares of brownfield land currently lying desolate and vacant.
A region which has seen some of the most positive effects of these initiatives is the North West; valuing construction projects in the region through Q2 2013 at a breath-taking £1.69 billion, the region’s construction has hit its highest level since mid-2009 and its construction value is now only second to London.
According to data collated by construction intelligence specialist Barbour ABI, the majority of new projects for the region are in Liverpool and Greater Manchester; the latter being the area where the Conservative’s recently announced plans to bring forward the second phase of the Help to Buy Scheme, at the conservative party conference held in Manchester, which allows first-time buyers to take out 95% mortgages, ensuring that the queue out of the door to take up newly built properties has just grown immeasurably.