House builder says ‘crisis is looming’
THE chairman of a North West housebuilder has said the basic business model for the sector will have to change to meet the government’s target of 240,000 new homes a year.
Alan Cherry, chairman of Warrington house builder Countryside Properties, which is involved in the the New Broughton and SportCity regeneration schemes in Salford and Manchester, believes a “serious housing crisis” is looming as only 60,000 new homes will be started this year – just 25% of the government’s target.
Mr Cherry said: “By 2010 pent-up demand for homes to buy, to rent and for affordable housing could well be over 1 million, and that is dangerously high.”
He added: “We have got to get used to saving for a deposit and if people cannot afford to do that they will need to rent.
“We are therefore likely to need an enlarged private rented sector in the years to come. This is because affordable housing will not be able to be delivered at a rate that is required to make up the shortfall in private housing, as at present its business model is inextricably linked to the strength or otherwise of the private housing market.”
Mr Cherry welcomes plans by the Homes and Communities Agency to canvas support among potential investors for the construction of developments that could be privately rented out to meet housing demand.
“They are said to be exploring the idea of guaranteeing a minimum rental income to persuade the private sector to participate. Such delivery models, which include joint ventures with the private sector, should be designed to be flexible enough to adjust to different market conditions,” he said.
