With the news still burning in Labour’s ears of the Welsh parliament by-election catastrophe in Caerphilly, more news comes of the Government’s disastrous promise to build 1.5 million new homes a year.
According to the Telegraph, developers are abandoning new-build projects across London as the business collapses, putting the government’s much vaunted housebuilding targets under even more threat:
According to a report by Molior Consultancy, work has stopped at one in six housing construction projects, including developments with more than 20 private homes.
Those projects would have provided up to 5,400 homes, the research suggested.
Weakening buyer demand combined with the long-term effects of inflation and rising costs have created a perfect storm in the housebuilding sector.
Experts told the Telegraph that stalling construction was “devastating” and claimed it showed Labour was “nowhere near” hitting its housing promises.
The collapse in construction projects means Labour’s annual target of building 1.5 million new homes nationwide and 80,000 new homes in London is looking increasingly beleaguered:
Ben Walden-Jones, Head of Residential Development at real estate company JLL, said the sector was in the worst state he had seen since the global financial crisis.
He described how construction on the business’s projects had slowed to a “trickle” after a “death by a thousand cuts”.
“Whereas we usually would have at least two launches a month in London, we now only get about one launch every two months. It’s as low as five schemes a year coming through.
“It’s a trickle. And the number of sales that we’re doing has just collapsed. Our competitors are in the same boat. No one is having any better luck, really.”
The industry is beset with exacting design standards that simply can’t be afforded in a market with very tight margins, especially those imposed in London by Mayor Sir Sadiq Khan:
The Government is also reportedly considering loosening design standards, such as the requirement for bicycle storage space and the provision of ‘dual aspect dwellings’, meaning homes with windows opening on at least two external walls.
Robert Colvile, of the Centre for Policy Studies think tank, said: “His [Khan’s] plans were stuffed with loads of things that developers could just about cope with in an environment where housebuilding was absolutely booming and they were making huge amounts of money.
“But that’s not the world we’re living in any more,” he added.
“There’s a really simple lesson: the only way you can get builders to build is if they can make money by building. A lot of people on the Left are hugely uncomfortable with that.
“They and many others have been taken aback by the sheer scale of the housing shortfall in London.”
The Centre for Policy Studies blamed the slowdown on Mr Khan’s “misguided” London Plan, the Mayor’s new blueprint for development, as well as excessive affordable housing requirements and the new building safety regulator introduced after the Grenfell Tower disaster.
Discussing whether Labour’s mooted reversals would be enough to restore the sector, Colvile said: “I don’t think it’s enough.
“Each of these was the straw that broke the camel’s back. The camel’s back is now broken, so taking off the straws isn’t going to do all that much.”
Tim Craine of Molior Consultancy alleges that Labour’s manifesto promises were “never realistic”:
They were always impossible targets set by people who don’t know how the world works.
If you went into a boardroom in any business and made the statements they’ve made, you’d have the door shut on you, and no one would pay them any attention.
It’s drastic. It’s devastating. It’s devastating that homes aren’t being built for rent. The country needs landlords so that young people can live somewhere of their choice, and that choice is disappearing rapidly.
However, there was some consolation from the Mayor of London’s office where they have no doubt who to blame for the problems. A spokesman is quoted as saying:
The disastrous legacy and underfunding from the last government led to record construction costs, high interest rates and lengthy delays from the Building Safety Regulator, which created a perfect storm leaving the capital facing the worst conditions for housebuilding in decades.
It’s always someone else’s fault, isn’t it?
Worth reading in full.
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