At the end of last year, over 1.1 million people were on local councils waiting lists for affordable housing in England alone, according to ONS figures. At the same time there were 52,100 additional affordable homes provided across England, according to figures from the Department of Levelling Up, Homes and Communities. This was a decrease from 2018-19 and 2019-2020’s figures. If we keep going at this rate, it will take 110 years to tackle the backlog.
There has been a reduction in the proportion of affordable housing, but the proportion of developer contributions for affordable housing has increased from 51 per cent in 2005-6 to 67 per cent in 2018-19. This resulted in £4.7bn being agreed for the provision of affordable housing.
A considerable proportion of this figure is attributable to commuted sums – where the developer pays a fee to the council instead of actually building affordable homes on site. In other words, councils are being handed more cash and more responsibility to build the affordable homes needed.
Councils are duly turning to modern methods of construction to try and deliver homes quickly, but the tide of rising inflation, material wastage and escalating costs of key materials are still major stumbling blocks. In all areas of the supply chain developers and registered providers of social housing are seeking to cut costs, especially as these frictions are forecast to get worse.
The industry is searching for a “golden fleece”; maximum efficiency, minimal costs and flexible design. But despite following newer methods, the systems are still outdated. Councils need software which accurately calculates costs and planning feasibility to reduce the risk of spiralling costs further down the line. This will in turn allow councils, housing associations and developers to test various planning compliant designs for any parcel of land without committing significant capital and requesting multiple amendments to architects’ plans.
Amended planning applications and appeals also mean proposals are bogged down and schemes with marginal profitability teeter over the edge – discincentivising developers to begin with.
Developers and local authorities currently operate in an analogue system, reliant on officers reviewing static planning documentation to judge a scheme. Meanwhile, spending on planning has fallen by 14.6 per cent since 2010. Telling councils to be more efficient is not a new call, it is a rallying cry for anyone who has ever tried to navigate the planning system – or perhaps just apply for a parking permit. But this is especially important when ensuring housing schemes are affordable and profitable. Margins made by developers are not as fatty as we might like to believe, and for them to build it, we need to make sure there aren’t unnecessary costs tugging at their purse strings.
If developers have interactive, digital 3D plans at hand, it becomes much easier to process the planning application.
New legislation set to change the energy-requirements for new homes will also soon become a pressure point. To future proof homes, all planning applications will need to be able to easily factor in the sustainability of the project.
Across the country, we need to enable the delivery of more sustainable, affordable homes to urgently tackle the growing backlog, especially in areas of greatest need. For too long, the approach has been fragmented and granular. By partnering with technology companies, councils could unleash the power of commuted sums to deliver affordable homes for those who urgently need them.