Can the government meet its house building target?

Following on from the general election last year, the government set an ambitious pledge to build one million homes in England by 2020. Roughly, this would mean that 200,000 homes would need to be built every year, which represents the highest levels of house building since 1989.

Right now the demand for housing is far outstripping supply. A recent Communities and Local Government (CLG) select committee hearing, sought to provide an insight into the plausibility of the 2020 target.

Whilst there was a general sense of optimism that the government’s target can be met, during the hearing there were also clear reminders that improving on 2014/15 figures will not be an easy task, unless underlying problems are addressed. For example, the lack of small and medium sized house building firms contributing to the turnout of new homes.

It is also thought there will be a significant shortage of skills required to meet the housing target, with roughly 650,000 more construction workers required in order to achieve it.

Building rates are also being affected by financial and demographic demands, making local authorities reluctant to develop on public land. A lack of central government funding and cuts to local authority planning departments also contribute to the issue.

As far as Brexit is concerned it is difficult to gauge how much impact it will have upon house building numbers, given the amount of uncertainty. In August this year, both Capital Economics and Shelter predicted that house building could fall by 8 per cent in 2017 and added that this could lead the government to miss its target, by 266,000 homes. This decline, they argue, would be caused by a general fall in demand for new housing projects.

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