Gove reinstated as DLUHC Secretary of State in cabinet reshuffle
Michael Gove has returned to the Department for Levelling Up, Housing and Communities (DLUHC) as Secretary of State, as new PM Rishi Sunak sought to cement his team after Liz Truss’ departure.
Gove previously held the position earlier this year, but was sacked in July after clashing with then Prime Minister Boris Johnson.
During his tenure, Gove had steered the Building Safety Bill through parliament, and worked on the Building Safety Pledge. Gove’s direct approach garnered mixed reactions from the industry, who must now re-engage with him after the departure of his predecessor, Simon Clarke.
Lee Rowley remains as Housing Minister, continuing in the role he was appointed to under Liz Truss’ tenure last month.
Meanwhile, planning reforms announced under Truss are set to be ditched, according to reports from Number 10.
This would mean that the proposed investment zones – areas of the country which would see streamlined planning regulations – would be scrapped.
The Home Builders Federation (HBF) has also written to the Office for Budget Responsibility (OBR) to express concern that abolishing housebuilding targets could result in 100,000 fewer homes being built each year, and a £17bn reduction in economic activity.
This follows recent signals from Government that they would scrap the previously-held target of 300,000 new homes a year by 2025 and move away from “top-down housebuilding targets”.
But, in a letter to OBR Chairman Richard Hughes, the HBF has said that moving away from this goal would result in local authorities reducing the number of new homes planned in their areas.
Whilst the home building industry’s role in tackling the housing crisis is well recognised, its contribution and importance to the UK economy remains far less understood.
STEWART baseley, executive chairman, home builders federation
As such, the potential economic impacts of new housing policies, such as the changes to the standard method for assessing housing need and increased taxation, are not fully appreciated by policymakers.
If housing delivery declines significantly, as is anticipated due to the Government’s upcoming reforms, the economic consequences will be substantial.
Lloyds warns of house price fall in 2023 as property transactions drop
Lloyds Banking Group has predicted an 8% fall in UK house prices next year, in a gloomy outlook for the UK economy.
Reporting its financial performance in Q3 2022, the bank forecast a -7.9% drop in house prices at the end of 2023.
An 8% drop in house prices risks putting some recent buyers into negative equity; but does not quite cancel out the house price increases seen over the past year, with the Office for National Statistics reporting a 13.6% increase in property values in the year to August 2022.
Meanwhile, the latest residential property transaction data from HMRC has revealed a fall over the year of 37% in September when compared to the same month last year.
However, this largely reflects the fact that buyers rushed to complete transactions last year before the stamp duty holiday ended on 30 September 2021.
In addition, builders’ merchants reported another reduction in volume sales in August 2022 when compared to the same month last year.
The latest Builders Merchant Building Index (BMBI) report has revealed that volume sales in the month reduced by 4.2% when compared to August 2021, but that revenue was up 10.0% due to rising prices.
BPF reports increase in build-to-rent homes
A report published by the British Property Federation (BPF) has shown that the total number of build-to-rent (BTR) homes either in planning, under construction or completed in the UK has increased by 15% between the third quarter of 2021 and the same period in 2022.
Rising from 209,313 to 240,202, the increase reflects the recent boom in BTR properties during the recent period of low interest rates and low inflation.
The analysis, in collaboration with Savills, also reveals that the pipeline of BTR homes remains strong, with 113,536 homes currently in the planning process.
Savills have projected that the number of completed homes could reach 380,000 in the next decade.
The BTR sector has grown strongly, with the pipeline now at over 240,000, but there’s a real need for planning efficiencies and policy support to help maintain the momentum, particularly in major cities where the private rentals market supply issues are most acute.
jacqui daly, director of residential investment research, savills
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