Housing is undoubtedly one of the big social and economic challenges of this decade. We are constantly bombarded with the statistics which illustrate the problem: the average unassisted first time buyer is now 37 years of age; there are 2.7 million people in their 20s and 30s still living with their parents.
There are two fundamental reasons for this. Firstly, we are not building enough housing. While industry volumes improved during 2010, they still remain below half of projected new households. Secondly, there is a persistent lack of funding available. The number of mortgages approved for house purchases April 2011 was 45,166 – the lowest figure so far this year, and the second lowest figure since March 2009.
The housebuilding industry is also a major contributor to both the national and local economies. The wider construction sector and its supply chain employs around three million people and accounts for 13% of GDP. Research indicates that each home built creates one and a half full-time jobs, with potentially twice that number of jobs created in the supply chain. Development can have a positive impact on the surrounding area. Through the regeneration of Raploch in Stirling, we are committed to providing 225 training places as well as apprenticeships and jobs for local people during construction. We have also established a recruitment office, to provide further training and employment opportunities.
We welcome the government's reform of the planning system which, as it currently stands, is a brake on the much needed supply of new homes. We believe that the underlying principle of ensuring planning decisions involve the local people who will be directly benefit from them is the right one, and we are seeking to work more closely with local authorities and communities.
However, there remains a significant risk that there will be an unintended reduction in the supply of new homes during the transition to the new regime, as planning authorities get to grips with the guidance.
Government schemes such as HomeBuy Direct, FirstBuy and the release of previously-developed publicly-owned land provide opportunities for people for whom home ownership was not previously a possibility. As a company we continue to use shared equity products sparingly, but we do believe they have a place in this mortgage-challenged market. Further affordable home ownership opportunities can be offered by specific initiatives from housebuilders – such as our own Friends and Family Advantage incentive and our Take5 mortgage product. We are seeing real progress here, with 29% of 2010 sales to first time buyers.
However, there are no quick fixes and changes will not happen overnight. There is not one issue and one solution – we need to work steadily, and be patient in the understanding that the process will take time.
Pete Redfern is group chief executive of Taylor Wimpey.
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