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Government only power able to right housing wrongs – Shelter

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24/07/2012
The unique nature of the UK housing market means it will simply never be able to deliver enough homes to fill the demand gap, making government the only institution able to boost supply.

A report by FTI Consulting, launched at a roundtable event hosted by Shelter and sponsored by Legal and General, suggested the private sector alone would not be able to overcome the hurdles in the way of the 250,000 homes a year the UK needs to build.

The report concludes there is therefore a long-term role for government to promote more competition, encourage new entrants to the market and help house builders access long-term finance, all of which can help to boost housing supply.

Mark Conaty, director of economic and financial consulting at FTI Consulting said the fixed amount of land, the planning system and long-lead in times for housing development builds act to constrain house builders and adds a layer of risk.

Conaty said many building firms have been forced to shift their focuses onto strategies such as land management rather than the delivery of new homes. Introducing the event,

Stephen Smith, Legal and General’s director of housing, said:

“This thought- provoking report throws down a clear challenge to all those involved in the UK housing market, especially Government, to develop long term solutions for our national housing needs, irrespective of tenure or sector.”

Economist Vicky Pryce said:

“This report found that for decades the supply of housing has fallen short of the level needed to meet demand. While planning reforms may improve the situation, they could only ever limit rather than remove the costs and constraints on house builders which act to limit housing supply. The report concludes that there are fundamental issues about the nature of the house building industry and the housing market that raise questions about the appropriate role of the state in facilitating an economically and socially optimal level of supply.”

Shelter’s chief executive Campbell Robb said:

“Britain’s housing shortage has pushed up house prices to the point where an entire generation is struggling to afford a home of their own. With house building at record lows, all political parties need to tackle this issue head on and set out a long-term strategy that not only boosts supply now but ensures future generations have the homes they need.”

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