New bottlenecks are hurting housebuilding

It was supposed to be a big problem with a simple solution. However, our nimbyistic planning regime, it transpires, is not the only thing getting between shovels and the ground. Stretched budgets at registered providers (RPs) and bottlenecks with building safety checks are also to blame. 

The industry has been talking about issues with RPs for some time. However, the publication of a study by the Home Builders Federation (HBF) shortly before Christmas made them glaringly obvious. At least 139 sites are currently delayed due to uncontracted 'section 106' units, amounting to more than 17,000 homes.

When private housebuilders receive planning permission, they are required to build a certain percentage of affordable homes. Homes built under section 106 agreements between providers and planning authorities – which account for 44 per cent of all new affordable homes – are then purchased at a reduced price by an RP. In theory, this is a neat way of ensuring that private housebuilders provide homes for everyone. However, RP budgets are stretched by a combination of capex requirements in their existing portfolios and higher construction and financing costs.