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Land prices biggest challenge to building new homes, forum warns

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Land prices biggest challenge to building new homes, forum warns


Published by Anonymous for in Housing and also in Development, Finance

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Land acquisition is set to become the biggest single challenge to the building of new homes with prices expected to rise by 10-25%, the Housing Forum has warned.

Members of the cross-industry body are worried about costs jeopardising the construction of new homes and refurbishment generally as price rises across the board outstrip inflation.

As well as land inflation, members are expecting the price of materials to rise by 7%, labour by 6% and professional services by 6% in the coming 12 months.

The Housing Forum has warned that price rises could also scupper plans for repairs and maintenance as housing providers struggle to procure the work within available budget.

Large construction firms and major housing associations across England, together with architects, project managers, legal advisors and national and international manufacturers took part in the first Housing Forum survey of market prospects in 2014.

The survey also found that:

  • Housing associations are anticipating a fall in output of affordable homes as they move into market rent and open market sales in greater numbers.
  • Housing associations continue to be concerned that the March 2015 deadline for completing homes under the last round of affordable housing grant cannot be met.
  • Housing customers, whether renters or owner occupiers, could benefit from home performance labelling to identify space and energy performance in both new and older homes.

Shelagh Grant, chief executive of the Housing Forum, said: “Looking beyond 2014, our members believe that as home ownership continues to be out of reach for many, shared ownership homes and market renting will be needed in greater numbers. We expect that housing associations and some new entrants to the house building market will venture into these products."


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