Pilot scheme heads off housebuilding hold-ups

New  scheme brings key players from private and public sector together to tackle delays.

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A new government backed pilot scheme launches today to unblock infrastructure hold-ups that are delaying the building of new homes.

It has been set up by the Housing & Finance Institute, who earlier this year published a major report which highlighted how failing water companies are severely infringing the ability of private developers to build more homes.

The pilot scheme is being carried out in the South East, with the help of the South East Local Enterprise Partnership, the Home Builders Federation, Laing O’Rourke, Anglian Water, Kent County Council, Essex County Council, KeepMoat, the Chair of the APPG for Infrastructure and the Department for Communities and Local Government.

It will seek to identify, assess and then unblock infrastructure problems in order to speed up house building.

The scheme will pay particular attention to housing developments that have been delayed due to a lack of water, sewage, electricity, gas or road connectivity. If successful, the plan is to roll the scheme out across the UK in 2017.

Natalie Elphicke, who previously authored the Treasury sponsored Elphicke-House housing report, says that the lack of local infrastructure on new housing sites is drastically slowing down the rate of new homes coming onto the market.

Elphicke, chief executive of The Housing & Finance Institute, said“When we speak to housing developers, they often say it is water, electricity, gas, broadband and roads which are impeding their ability to build more homes faster.

“Water and sewage connectivity is a particular problem, with some water companies completely failing to deliver what housing developers require. This has been slowing down the rate of housing completions right across the country.

“Our hope is that this new pilot scheme, which brings together key players from the private and public sectors, will provide us with a blueprint for fixing these issues and facilitating accelerated housing growth.”

The scheme will run until May 2017, with its initial report due by the end of January 2017, and its findings being reported to housing & planning minister Gavin Barwell MP and Stephen Hammond MP, chair of the All Party Parliamentary Group on Infrastructure.

Barwell, said: “This government is committed to speeding up housing delivery and ensuring that everyone plays their part towards building the homes our country needs.

“I welcome this new pilot scheme and its focus on identifying ways of working together to overcome infrastructure barriers, and I look forward to seeing the initial report on its findings.”

A water company can currently take between six months and a year to connect a property and still meet their regulatory target. This is despite the fact that the water company will benefit from the revenues of the new connections for many years.

Research in the HFI’s summer report, Let’s Build More Homes Faster, revealed the scale of the failure currently being seen around the UK. Of the water connection performance, only Dee Valley, which operates in Wales and Cheshire, secured 100 per cent of connections.

The company that has failed its performance targets most dramatically was Affinity Water. Affinity Water services critical growth areas in the South East as well as in London. In quarter one of 2015 it failed its performance target by nearly 60%. Its average performance over the first three quarters of 2015 saw its performance fall by nearly 40%.

Significantly poor performances were recorded for Thames Water, Southern Water and South Staffordshire, all of which saw 20-25% failure rates in at least one quarter of 2015.

Background

In March 2016 the Housing & Finance Institute launched its research “How to Build More Homes, Faster”.

The paper highlighted that water connectivity was delaying housebuilding in some areas and that roads and rail upgrades, such as bridge strengthening, could be critical to bringing forward faster housebuilding in some areas.

In the Autumn Statement 2016, the chancellor Hammond announced a new £2.3bn fund to invest in infrastructure to accelerate housebuilding,  especially on roads and water connections.

One of the Institute’s recommendations was infrastructure dependencies and capacities mapping to be carried out to more clearly identified what infrastructure was required where in order to ensure that money was spent in the right places to accelerate housing delivery.

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