Knight Frank UK Housebuilding Report

Highlights from the Knight Frank UK Housebuilding Report

Knight Frank, the world's largest privately owned global property agency have released the results of their second annual UK Housebuilding Survey with the results based on answers from over 100 respondents from all over the UK.

The survey reports the main concerns of experts within the industry and their views on government initiatives and targets. Concerns outlined in the Knight Frank UK Housebuilding report include mortgage financing, environmental legislation and government schemes such as the Community Infrastructure Levy.

Mortgage Financing

Mortgage financing was one of the biggest concerns for many of the respondents with 29% expecting a decrease in bank funding but on the other hand 22% expected an increase.

The report does suggest that only half the amount of mortgage applications are approved today, compared to the amount approved in 2007.

The Environment

Environmental concerns were another major subject in the Knight Frank UK Housebuilding Report. From 2016 all new homes are expected to produce zero carbon which could add considerable building costs.

Lettings

From a lettings perspective, environmental legislation is also costing landlords. From 2018, properties with F or G ratings on the Energy Performance Certificate (EPC) cannot be let without improvements being completed. There are thoughts within the industry that this could even be brought forward to 2015.

Community Infrastructure Levy (CIL) is a government scheme which encourages local authorities to charge house builders on new developments. The money is used for local community improvements such as roads and health centres but the survey showed some fears that it could negatively affect the supply of residential development land.

Another scheme the government have introduced is the New Homes Bonus Scheme where local authorities are given a payment matching the council tax income for approving plans for new homes. The government target is an extra 200,000 homes per year but according to the survey, 81% believe it won't have much affect in the next year. The scheme has already been running for two years.

The National planning policy planning policy (NPPF) is a newer scheme finalised in March this year. The Department for Communities and Local Government say the aim is "to make the planning system less complex and more accessible, to protect the environment and to promote sustainable growth". Knight Frank believe this will take a little while to settle in before it will work as it is intended but that it still offers little change.

Despite the barriers and challenges facing the industry, 54% of respondents expect to increase their housing completions and Knight Frank state in the report that "A healthy start to the year- as reflected in robust trading statements- has buoyed confidence, and the green shoots can be clearly seen in our survey results".