End dominance of major housing builders, MPs urge

A report by the Communities and Local Government Committee has called on the government to end the dominance over the housing market of the major homebuilding firms and encourage councils and housing associations to build more.

The report highlighted that the eight largest firms build more than half of all new homes in the UK, while building by local authorities and housing associations has also ‘almost ceased’.

The MPs warned borrowing caps on councils’ Housing Revenue Accounts limit their ability to build and should be raised or, in the areas where housing affordability is at its worst, removed.

The report also urged Whitehall to support small and medium sized builders to make the housing market more competitive. It recommended improving access to land and finance, and reducing the risk for these builders by providing infrastructure and planning permissions.

Clive Betts MP, Chair of the Communities and Local Government Committee, said: "The housing market is broken, we are simply not building enough homes. Smaller builders are in decline and the sector is over reliant on an alarmingly small number of high volume developers, driven by commercial self-interest and with little incentive to build any quicker. If we are to build the homes that the country so desperately needs, for sale and for rent, then this dominance must end.

“A successful housing market is a competitive one and government should support smaller developers if it wants to increase the housing stock. This includes earmarking land, improving access to finance and reducing risk by proactively preparing sites for development. Local authorities have a key role to play but have not been given the tools they to make an effective contribution to solving this crisis.

“Innovation must also be encouraged and we need to finally get to grips with the major challenge of ensuring that the industry has a much-needed supply of skilled workers, without whom this country’s housing crisis cannot be addressed. The government’s promises are encouraging, but their implementation must be closely scrutinised."