Ambition is key to development
However, for many local authorities it has been many years since they last built significant volumes of housing.
Ambition is necessary, but not sufficient. Assembling teams with the right skill sets to unlock that housebuilding potential will take time.
As a result, it is likely that council development will ramp up over a number of years, rather than reaching its full potential right away.
Earlier in October, Prime Minister Theresa May unexpectedly announced proposals for a further stamp duty surcharge on non-UK resident buyers of between 1 per cent and 3 per cent of a property’s purchase price.
The Budget brought further detail, proposing a consultation of a 1 per cent surcharge – the bottom end of the range Mrs May suggested.
The government also announced measures to support the vitality of the high street in this year’s Budget. As well as cuts to business rates for smaller buildings and tax relief for local newspapers and public lavatories, the chancellor also announced a consultation on permitted development rights.
The proposed changes include allowing developers to extend retail buildings upwards to accommodate new housing, or even to demolish existing shops to develop the land as housing.
While this increased flexibility may allow some new conversions from retail to residential, it is unlikely to trigger a significant shift in housing delivery. However, the consultation is still at a very early stage.
The news on H2B has the potential to stall the growth in housebuilding.
It remains to be seen the extent to which the other two announcements, and other policy measures, contribute to the government’s target of delivering 300,000 new homes every year.
Lawrence Bowles is associate director of Savills Residential Research
