Aneisha Beveridge, research director at Connells Group, insists the current economic climate is affecting housebuilders as a new report says the amount of new homes receiving planning permission has fallen by a fifth.
She said: “The sharp fall in planning permissions highlights the scale of the challenge facing the Government if it is serious about delivering 1.5 million homes.
“Housebuilders are grappling with a difficult combination of higher development costs, planning delays and weaker buyer demand, meaning many sites simply don’t stack up financially.
“Without confidence that there will be enough purchasers at the right price point, developers are understandably cautious about bringing forward new schemes.
“The proposed new equity loan scheme has the potential to change that relatively quickly. One of the key lessons from Help to Buy was that boosting first-time buyer demand gave developers greater confidence to invest and increase output quite quickly, with new-build delivery rising strongly in the years that followed its introduction.
“However, the eventual impact will depend heavily on the detail. Income limits and property price caps that are set too tightly could concentrate the benefits in a relatively small number of markets, while a broader scheme would support more buyers and unlock a larger increase in housing delivery.”
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