Government strategy could be restricting the supply of new homes

Date:

Wednesday 5th September 2012

PM David Cameron and deputy PM Nick Clegg with housebuilders earlier this year.

Fresh analysis by Savills property consultancy raises questions around the government's strategy to support the sluggish housebuilding sector.

With the major residential property event, RESI, just a few weeks away (13th to 14th September), analysis compiled by Savills at RESI 2011 has just been re-evaluated by the property firm ahead of this year's show.

It revealed that while the industry has a very good understanding and made accurate predictions about current trends and immediate changes in the property sector, there has been an imperfect understanding, and inaccurate predictions made, of the direction of travel in the broader economy and longer-term issues affecting the economy and residential property.

Savills' Yolande Barnes points to the fact that the recent unexpected increase in developer profits caught the property industry completely by surprise. Most respondents had expected them to fall. It turns out they have increased by around 25% in 2012 against the previous year.

"This is disturbing because it suggests an imperfect understanding of how housebuilder business models and behaviour are interacting with the wider economy, with the unexpected funding environment and even with changing policy conditions," said Barnes.

A better understanding is required if the residential property industry is going to adapt and help increase the supply of new homes across the country in the future, as well as in the short term.

"Government also needs to understand the likely changes and impacts accurately if it is to make effective policy in this area and increase the output of homes in the future," added Barnes.

New Homes in New Homes

Part-Exchange Available
Langleys Quay
Langleys Quay, Halesworth, Suffolk, IP19 8JR
NOW AVAILABLE from £234,995
Langley's Quay is an attractive development of 2, 3 & 4 bedroom homes located in the Suffolk market town of Halesworth. Langley's Quay is ideally...
Part-Exchange Available
St Michaels Place
St Michaels Place, Aylsham, Norfolk, NR11 6YA
NOW AVAILABLE from £299,995
St. Michael's Place is situated on the outskirts of the thriving historic market town of Aylsham, nestled in the heart of the Norfolk countryside,...
Part-Exchange Available
Mulberry Gardens
Mulberry Gardens, Mulbarton, Norfolk, NR14 8GG
NOW AVAILABLE from £324,995
Over the years, Mulbarton has grown around its common and its charming parish church. Today's residents benefit from primary and middle schools, a...
Part-Exchange Available
Fairfield Park
Fairfield, Costessey, Norfolk, NR5 0UH
NOW AVAILABLE from £144,995
Fairfield Park is only a few minutes from all that the centre of Norwich has to boast a fantastic mix of theatres including the Maddermarket Theatre...