building crane city

Are Gove’s big-city building plans enough to boost UK housing supply?

A new survey has found that many landlords are sceptical about whether housing secretary Michael Gove’s building plans will ease the housing shortage. 

Earlier in the summer, Michael Gove, secretary of state for levelling up, housing and communities, announced bold new plans to boost building on brownfield sites across the UK’s cities. The goal is to build one million new homes over this parliamentary period, while protecting green belt areas.

The measures are aimed at “unblocking the planning system” by allowing brownfield areas to be seized and built upon, increasing housing supply while also allowing the UK’s cities to grow and thrive. It will involve an easier planning process to convert unused shops, offices and other premises into city centre homes.

However, some recent research from Mortgages for Business has found that many landlords are not convinced that the big-city building plan measures will go far enough, or will even achieve the target of one million new homes that the government has set out.

The way we use cities is changing

From London to Manchester, Birmingham, Liverpool, Leeds, Sheffield and Newcastle, the UK’s major cities are undergoing some big changes. The way people work and live is evolving, accelerated by a huge increase in home-working and hybrid working patterns, and this is affecting urban areas.

For example, many companies have downsized their offices or even closed them as their staff are now able to work fully or partly remotely. While the number of workers who do attend an office regularly has increased over the past year, for many, these new working patterns will be permanent.

This means there are a number of unused buildings that could now provide much-needed homes for people instead, with many professionals in particular still keen to live in a city close to amenities and entertainment options – even those who work from home.

Many places are also seeing an increase in the number of shops being converted to bars, restaurants and cafes, as more and more people opt to shop online rather than on the high street. Ultimately, this maintains the vibrancy of these areas, while the usage is changing.

Increasing the number of homes in city centres will therefore be positive for many people, from buy-to-let investors targeting the growing number of private rented sector tenants, to homebuyers.

Building on brownfield

However, 59% of the 270 landlords surveyed said that Gove’s building and planning reforms “wouldn’t scratch the surface, according to Mortgages for Business’s survey. Just 7% of landlords thought that the plan would be successful, while 15% said the reforms could work “to a small degree, but not at scale”.

Almost a fifth (19%) said they thought the changes could actually make the housing shortage worse, because they focus solely on building homes in cities.

Gavin Richardson, managing director of Mortgages for Business, said: “Britain needs more homes to fulfil more dreams of home ownership and increase choice for renters. It’s great that these proposals mean that fewer empty shops or offices are left gathering dust while we have an urgent need for more homes.

“But on their own, a review of the rules around permitted development rights is not going to achieve very much. This is a small piece of a very large puzzle — on its own, there’s no way it is going to fix the housing crisis.”

London’s green belt should be targeted

A quarter (24%) of the respondents said they thought it was possible that building on brownfield sites alone could tackle the housing supply shortage, but an overwhelming 76% said it would not be enough to resolve the issues in the market.

According to Richardson, more drastic action is needed to significantly boost the country’s housing supply, and this could involve building on London’s green belt, as the south east has the greatest shortage of homes.

“Building in urban areas is an important element in providing more homes but there’s a question of capacity. There’s only scope for 2,000 homes to be built on brownfield sites in Oxford, for example, while in Cambridge it is 2,500.

“Furthermore, building in Birmingham, Manchester and Liverpool is not going to solve the housing shortage in the southeast. To do that, we are going to have to build on London’s green belt.

“Until we accept the need for a ‘green and brown belt’ around London, the South East will continue to be short of homes, which will, of course, support the business plans of thousands of landlords.”

Stay ahead of the market: BuyAssociation has a range of property investment opportunities available in key city centre locations across the UK. Get in touch for more information. 

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