■ There is land buying appetite from housebuilders who have seen relatively strong sales rates in the second half of 2016 with targets to continue to expand their output. Support from Government includes the £3bn Home Building Fund and Help to Buy Equity Loan, now extended to 2021. However, land purchasers are likely to continue to be selective and more careful about the sites they buy.
■ We expect continued high demand for low risk sites close to established markets or good transport links with little or no remediation required.
■ Urban and suburban sites in regional cities will continue to see interest from those looking to expand or move their activities to areas with greater chance of growth.
■ The availability of labour continues to be a notable factor constraining the expansion of the industry, although it has eased as an issue. 39% of builders consider it a major constraint according to the Q3 2016 HBF Survey compared with 63% in Dec-14. We still need to expand the skilled workforce to build the homes needed.
■ Several Government policies are set to bring more development land to the market including:
▸ The £2bn Accelerated Construction Fund which aims to deliver 15,000 homes on surplus public sector land.
▸ The announcement of 17 further Garden Towns and Villages which have the potential to provide almost 200,000 new homes across the country.
▸ The announcement of 30 local authority partnerships set to be the first to build Starter Homes on brownfield sites, backed by the £1.2bn Starter Homes Land Fund. At the time of publication we await the confirmation of the definition of Starter Home.
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