Targets to build 29,000 new homes per year in the South West, to tackle its severe housing crisis, could still be delivered – despite dire times for the region’s property and construction companies.
With shrinking order-books, South West builders expect to reduce their employee numbers, but believe that they could still deliver the region’s housing targets, if local councils move to identify sites and provide planning consents.
These are among the top-line findings of a new survey, conducted by the property & construction team at Bishop Fleming, the accountancy firm with the widest spread of offices throughout the South West.
A massive majority of South West property and construction companies (93%) say that they are less confident in the region’s prospects for their industry sector for the next six months.
More than half (56%) report that their orders for new work are less than six months ago. Half the respondents to the Bishop Fleming survey also confirm that they expect to employ less people over the next six months.
According to David Savill, head of Bishop Fleming’s property & construction team: “Despite having the country’s biggest housing crisis, with the largest affordability gap between average earnings and average house-prices – and the biggest gap between housing delivery and demand for new homes – these findings reflect the regional impact of the ‘credit crunch’ and the massive down-turn in the housing market”.
This assessment is confirmed by almost half (49%) of survey respondents identifying the “credit crunch” as the single biggest factor affecting the South West’s property and construction industry, starving new development funding.
However, most respondents (55%) said that it is still possible to deliver the Government’s newly announced target for 29,000 new homes per year, including a higher proportion of affordable homes, if local councils now move to identify land for housing development and provide the necessary planning consents.
However, almost half the respondents to the Bishop Fleming survey (47%) said that a lack of council planning staff and greater red-tape regulations are making it more difficult to progress any new development in the South West.
“This is a crucial issue for local planning authorities. The sudden down-turn in planning applications should enable councils’ planning departments to concentrate on delivering local plans for new housing and employment, while the redundancy announcements by developers should release much-needed skilled planners to be employed by councils”, said Mr Savill.
Meanwhile, a majority of South West property and construction companies (61%) condemned the Government’s newly introduced “Energy Performance Certificate” requirement for commercial properties – stating that these EPCs will be as big a fiasco for commercial buildings as the new requirement for Home Improvement Packs (HIPs) for residential properties.
“Right now, there is a legal requirement to produce EPCs for new commercial buildings, commercial properties offered for sale or lease, and all public-access buildings: but there remains a shortage of trained and qualified assessors to provide those certificates”, said Mr Savill.
This is an example of Government “red-tape” hindering rather than helping the economy, according to David Savill.
“Our experience, backed by this survey, shows that business leaders are clearly making the tough decisions necessary to survive the downturn. Central and local government, however, are much slower to react.
“At the moment, too much government resource is focused at hindering business with red tape, such as the new EPCs, with not enough focused on initiatives that help business to create wealth. Business, not government, will create the wealth to lead us out of the downturn; so Government must remove the blocks that prevent or hinder businesses”, said Mr Savill.
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