Assetz Capital chief executive Stuart Law has cautiously welcomed upcoming planning reforms but warned of six months of “instability” for housebuilders due to challenging macro conditions.
The peer-to-peer lending platform chief heralded aspects of the Levelling Up Bill, which was introduced by the government yesterday.
In the new bill, the government said it will introduce a digitalised planning system to make plans and planning applications available on smartphones, councils’ local plans will have more community input and legal weight, and local design codes will be mandatory so developers have to respect styles that are drawn up.
“Whilst we cannot control global economic factors, one way we can easily lessen the financial challenge facing housebuilders is to expedite reform to the planning system to remove unnecessary red tape that adds to upfront costs,” said Law (pictured).
“Positively, we heard yesterday that future legislation, through the levelling up agenda, will include the digitisation of the planning system. This will result in long term wins in terms of efficiency, speed, ultimately lowering housebuilders’ costs.
“However, a commitment to radical and comprehensive planning reform was a notable omission from the Queen’s Speech this week. Given the huge deficit between supply and our national housing need, I had hoped planning reform would feature more prominently in the legislative agenda going forward.”
Law expressed concerns that “watered down planning proposals” would not be enough to drive growth in housebuilding and create more sustainable pricing for new homes.
Law’s comments come as the latest official data showed that monthly construction output increased by 1.7 per cent in March – the fifth consecutive monthly growth and a record high in monthly level terms (£14.9bn) since monthly records began in January 2010.
“Whilst this pick up in construction is positive news for the housebuilding sector in the short-term – as it continues to recover post pandemic – we can’t ignore the broader political and economic pressures that continue to impact housebuilders as they operate within a challenging, unstable environment,” said Law. “I foresee this instability being the reality for at least the next six months.
“Macro-economic factors continue to linger. The construction industry is now beginning to feel the true knock-on effects of the Ukrainian conflict. The imposition of sanctions has driven up the cost of both raw materials and energy.”
Read more: Jonathan Kirk returns to Assetz Capital