The housebuilding crisis could result in major changes to the way new homes in the UK are financed, built and planned, according to a new report by Knight Frank.
The public sector, sovereign wealth funds and wealthy individuals are likely to be the active buyers of land put on the market by struggling housebuilders, the Future of Residential Development report said.
Jon Neale, head of development research at Knight Frank, said: ‘This transfer of land, much of which is earmarked for development as part of the government’s drive to deliver millions of new homes, could have real implications for the industry.’
Investors who buy the land are unlikely to embark on development, but if they do, they will probably use housebuilders as contractors or consultants rather than partner them, Neale said.
Some housebuilders are beginning to see opportunities, he said, but in the meantime there is an opportunity for the public sector.
‘It is highly likely that many larger sites could come into public ownership over the next few years, particularly as land values are so low,’ said Neale.
‘There is an opportunity here for government agencies to provide them with infrastructure, preparing sties for development when the market returns to strength. Again, though, it is likely that the public sector will exert greater control over the build-out by retaining a stake in the scheme.
‘Consequently, it is entirely possible that traditional volume housebuilders could play a smaller role in the delivery of homes in the future.
‘It is wrong to be too pessimistic about the current situation. Indeed, it offers a new opportunity to reshape the industry and the policies that guide it to better cater for Britain’s housing needs.’
For the full report, due out on Tuesday, contact Jon Neale, head of development research at Knight Frank.