Assetz Capital chief executive Stuart Law has urged the housebuilding sector to “pick up the pace” and highlighted the role that alternative lenders can play in helping to address the housing crisis.
He also called for simplification of the planning process to speed up housebuilding.
The government wants to 300,000 new homes to be built across England each year by the mid-2020s.
“Given the country’s chronic housing under-supply we need to pick up the pace faster in the housebuilding sector and find ways for housebuilders, especially small- and medium-sized enterprises, to move forward with viable schemes despite the financing challenges they face in the current climate,” Law (pictured) said.
“Easy access to funding, often not available through traditional lenders for housebuilding schemes, is crucial, as is the simplification of the planning process. With innovative financing and a less onerous planning system, viability can be improved, making projects more resilient against challenges like those we are currently seeing.”
Law’s comments were in response to new construction data, published by the Office for National Statistics on Friday, which showed that monthly construction fell by 0.8 per cent in May 2021 from a month earlier because of declines in both new work (0.4 per cent) and repair and maintenance (1.5 per cent).
Law put this down to a shortage in materials and labour, due to the pandemic and Brexit limiting supply and reducing the workforce in the UK.
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Assetz Capital is predicting that house prices will continue to rise strongly over the next 12 to 18 months, due to high demand from buyers and low interest rates.
“While these difficulties may present a serious challenge for the construction industry, there is still strong appetite from housebuilders who know they have an opportunity to capitalise on the current dynamics with buyers willing to stomach high prices to secure a move to facilitate their new lifestyle priorities post-pandemic,” he added.
“We expect this trend to continue for some time and that will maintain momentum in construction, even if growth continues to be somewhat dampened by issues with labour and materials.”