The Government should end the dominance over the housing market of the major homebuilding firms and encourage councils and housing associations to build more, MPs say.
A Communities and Local Government Committee report found that the eight largest firms build more than half of all new homes in the UK. Building by local authorities and housing associations has also ‘almost ceased’, it added.
The MPs warned borrowing caps on councils’ Housing Revenue Accounts are limiting their ability to build and should be raised or, in the areas where housing affordability is at its worst, removed.
The committee’s report also urged Whitehall to support small and medium sized builders to make the housing market more competitive. It recommended improving access to land and finance, and reducing the risk for these builders by providing infrastructure and planning permissions.
‘The housing market is broken, we are simply not building enough homes,’ said committee chair Clive Betts.
‘Smaller builders are in decline and the sector is over reliant on an alarmingly small number of high volume developers, driven by commercial self-interest and with little incentive to build any quicker.
‘If we are to build the homes that the country so desperately needs, for sale and for rent, then this dominance must end.’
Mr Betts emphasised that in order for the housing market to be successful, it needs to be competitive, and he urged the Government to cultivate more competition between developers.
‘This includes earmarking land, improving access to finance and reducing risk by proactively preparing sites for development,’ he said.
‘Local authorities have a key role to play but have not been given the tools they need to make an effective contribution to solving this crisis,’ he continued.
‘Innovation must also be encouraged and we need to finally get to grips with the major challenge of ensuring that the industry has a much-needed supply of skilled workers, without whom this country’s housing crisis cannot be addressed.’
Mr Betts concluded that the Government’s promises are ‘encouraging’ but stressed that their implementation needed to be ‘closely scrutinised.’
