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Certainty is the key to realising the potential of residential development
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With delegates gathering for Property Week’s 12th Annual RESI conference there will be long and earnest discussions about what the future holds for the residential property market.
The conference comes on the back of positive performance results announcements by several key players in the residential market – Barratts, Berkeley and Redrow – in which delivery of units nationally is strong, and profitability is strong.
It appears the residential sector is in a good place. National Planning Policy Framework (NPPF) 2 is now in place. The government remain committed to delivering 300,000 units per year, and tackling the housing crisis remains high on the political agenda.
Innovation and creativity are bolstering the drive for delivery with exciting developments in proptech, and in the design and construction of developments that will drive the sector to meet the ever-changing wants, needs and aspirations of the people it builds for.
And yet there is still this nagging suspicion that the sector delivery potential is being curtailed.
There is one word that explains this sense of the sector being held back, which if tackled could enable the operators within the residential sector to actually achieve what we all want which is a solution to the housing crisis. That word is uncertainty.
Brexit is the most obvious and immediate example of this uncertainty. For investors it affects the appetite for risk and the overall economic confidence whilst we await the details of the final deal.
Uncertainty exists within the NPPF when it comes to each local authority’s housing targets. We have the government’s standardised housing target calculation methodology, which is backward facing. This is competing with the forward-looking aspirations of local authorities seeking economic growth and setting housing targets to reflect their ambitions. Yet who gets the final say when it comes to allocations and ensuring there is certainty on land supply arguments in the planning process, including appeals and inquiries is not always clear.
The future of Help to Buy remains unclear and uncertain. Whilst politicians hold any decision in abeyance then future first-time buyers don’t know if they will have the help to get onto the housing ladder and the residential sector is left not knowing if the tap will be turned off and the implications this has for their confidence to develop out its pipeline.
Without doubt there is a great deal to be positive about but just imagine what could be achieved if we addressed that one word – turning uncertainty into certainty!