David Cameron’s new Conservative administration needs to sit down with housebuilders to thrash out plans to deliver 200,000 cheap starter homes, the chief executive of Barratt Developments has said.
A key plank of the Conservatives’ election offering was a promise to build the homes for first-time buyers under 40 on “brownfield” land previously used for commercial or industrial use. The discounts – of up to 20 per cent on the market price – would be funded by the waiving of affordable housing payments made by developers to councils under so-called Section 106 agreements, in return for gaining planning permission.
The scheme was begun under the Coalition, promising 100,000 homes which was then doubled to 200,000 by the Conservatives during the election. It drew fire during the election from critics who claimed it would hit affordable housing provision and that the payments were too small to fund the discounts.
Mark Clare, the Barratt’s boss who will be leaving the business in July, said: “One of the things we would expect the new administration to do is start to engage with the industry so we can start to understand what they are trying to do and how we can deliver that.
“It’s something that needs to be worked through. It depends on land values and the size of the 106. We need to sit down with officials and craft something that will work. Clearly the Conservatives are going to want to hit that target.” The new Government has a full in-tray on housing, he added. “It needs to continue its assault on the planning system, to make it simpler. We need public land released in spades, not only to deliver more land for housing but more receipts for the Treasury. We’ve all got to think hard about skills requirements – we need 18,000 more tradesmen across the industry.
“It’s easy to throw the numbers out but it’s more difficult to say how they going to be trained – are we going to get people back in the industry, does it mean we have to bring more in from overseas?”
Barratt – the UK’s biggest housebuilder by volume of homes sales upgraded targets for the year to June to 16,100 properties from 15,700, and will go into the next financial year with record forward sales of more than £2.6bn. It is selling homes more quickly from a larger number of sites than last year, Mr Clare said, and the firm saw “no discernible effect” on the market from pre-election uncertainty.
“We didn’t see a big mist over the last eight weeks. Buyers were buying regardless of what they thought the outcome would be. At the very top end there is no mansion tax and no non-dom restrictions [both Labour policies] but we don’t have much exposure to that.”
Barratt shares rose 18.5p to 564p, a rise of 3 per cent. Charlie Campbell, an analyst at Liberum, said: “The housebuilders are well placed to benefit from an improving housing market, driven by falling mortgage rates and rising wages and confidence.”Reuse content