Assetz Capital chief executive Stuart Law has underlined the importance of using small- and medium-sized housebuilders to address the housing crisis, as official data showed that house prices grew at the fastest annual rate in nearly 14 years in March.
The Office for National Statistics (ONS) reported that UK average house prices increased by 10.2 per cent over the year to March 2021, up from 9.2 per cent in February 2021. This is the highest annual growth rate since August 2007, the ONS said.
Commenting on the figures, Law said that the house price growth reflects the reassessment of housing needs in the UK, as more people seek out homes in less urban locations as they work from home.
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“This dramatic increase in demand has highlighted that there is a severe lack of housing which meets these criteria and brings into question whether we will be able to build new homes quickly enough in the places that people want to live,” Law said. “As a result we expect prices to continue to rise strongly with our forecast predicting around eight per cent or more for both 2021 and 2022 at the very least.”
Law said that while construction has started to take off again in recent months, “we need to pick up the speed” to meet housing demand.
“SME housebuilders must be at the heart of that effort due to their ability to innovate new building processes and apply their superior local knowledge to develop the right housing stock in the right locations,” he said. “However, over the last thirty years we have seen SME housebuilders decline from accounting for 40 per cent of the housebuilding sector to only 12 per cent.”
Law said his peer-to-peer lending platform has received hundreds of millions of pounds worth of loan applications from SME housebuilders over the last few months, “demonstrating that they are primed and ready to progress schemes”.
“We now need to build on this momentum to propel us towards the 300,000 a year national housing target and the planning reforms proposed last week could be an important part of that, drastically reducing the burdens the current planning system places on housebuilders, especially SMEs that have less budget and resource,” he added.