Assetz Capital chief executive Stuart Law has said that alternative lenders need to fund the construction of factory-built eco homes to address the housing crisis.
The Halifax House Price Index has showed prices rose by 1.7 per cent in September, the strongest growth since February 2007. It also found that consumer demand for larger homes and more open space led to cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.
Law (pictured) said Covid has led to a change in consumer demand and predicted the desire for larger homes in more rural areas to persist and be a key factor driving house price growth over the months to come.
He said although the UK’s housing shortage is nothing new, the surge in interest in such a specific type of home creates additional pressures for the market. Law said he believes this is where small- and medium-sized enterprise (SME) housebuilders creating innovative, factory-built homes can play a “key role” going forward.
“The construction time for such homes is far lower than traditional methods, they usually have very high energy efficiency ratings and offer greater productivity benefits versus dozens of tradespeople working on the construction of a house over many weeks on site,” he said.
“Smaller infill sites built by SME housebuilders also make better use of existing infrastructure, rather than creating new facilities or building on open countryside.
“These businesses will need far greater external support to enable them to scale at speed and meet the nation’s changing housing needs, in addition to the supply provided by national housebuilders.
“Streamlined planning processes and increased access to alternative funding, such as that provided by Assetz, would massively help the industry overcome the limited support provided by high street banks and play a key role in the development of the UK’s future housing stock.”
Law said with the stamp duty break now over, the market seems to have paused for a moment to catch its breath, but house price growth will continue to gain momentum as we move into the new year.
Russell Galley, managing director at Halifax, said demand may soften in the months ahead but the limited supply of properties remains the deciding factor.
“Against a backdrop of rising pressures on the cost of living and impending increases in taxes, demand might be expected to soften in the months ahead, with some industry measures already indicating lower levels of buyer activity,” said Russell Galley, managing director at Halifax.
“Nevertheless, low borrowing costs and improving labour market prospects for those already in employment are likely to continue to provide support.
“Perhaps the biggest factor in determining the future of house prices remains the limited supply of available properties. With estate agents reporting a further reduction in the number of houses for sale, this is likely to underpin average prices – though not the recent rate of price growth – into next year.”