“The house price inflation forecasts of 5.2% in 2014 and 7.2% in 2015 released by the OBR today are startling and demonstrate the crucial need to create a sustainable housing market.
“The move by the Chancellor to give the Bank of England the mandate to act on housing bubbles is sensible and will help to create an environment of sustainable price growth, rather than the peaks and troughs suffered from in the past. However it must be backed up with quality housing data, to ensure that policy response is considered on local data and not biased to the impact of house price inflation in the capital. This must include data on planning permissions granted by local authorities and joined up data on new building and local house prices by type of housing stock.
“The long term strategic approach being taken by the government on infrastructure must now be taken on housing – giving the confidence for the whole supply chain to mobilise to deliver the growth that will follow. At the moment many suppliers are still concerned about sustainability of support for Help to Buy/high LTV mortgages post 2015 and this risks price increases and reluctance to invest.”
Crosby believes the Chancellor’s decision to trial a scheme to directly compensate local households for planning granted in their areas could finally change NIMBY attitudes to development, and ultimately release supply for housing development in a massive way.
“Most people don’t want housing next door to them and worry about the impact on school places, A&E waiting times and transport infrastructure that new developments might bring. Direct compensation could overcome these concerns, reduce objections to new developments and pave the way for the release of new supply,” said Crosby of the measures announced in the National Infrastructure Plan.
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