Last week, the Department for Communities and Local Government published a white paper entitled ‘Fixing our broken housing market’, which proposed a raft of measures to boost UK housebuilding.

Among the list of solutions were plans to prioritise the development of brownfield sites, diversify the market by backing SME builders and encourage the creation of higher-density projects.

However, Paul Staley, director of private rented sector (PRS) at lettings and surveying specialist SDL Group, has now questioned the decision to put greater emphasis on developments which prioritise the use of space, such as larger apartment blocks.

“This is the direction most institutions are following as it’s an easier and more straightforward transaction to invest £50m into one of these schemes, rather than, say, 500 houses spread over 10 sites in the North of England,” he explained.

“If we’re not careful, I feel the effort to grow PRS may have a very strong southern and city-centre bias.”

Natalie Elphicke, chief executive of The Housing & Finance Institute and former government housing adviser, warned that non-urban southern regions may not be able to cope with such an influx.

“The government is right to support the building of homes at greater densities and to bring in fairer protection for tenants.

“These are two very practical measures to help Londoners.

“But the government needs to be careful not to let London off the hook by imposing the biggest housing targets on the South East and further straining infrastructure in those areas.”

‘I would have expected much more substance’

The white paper encouraged building higher-density developments where appropriate

By contrast, although Rajiv Nathwani, director of bridging lender Quivira Capital, was critical of the white paper, he identified the push for higher density as one of its few redeeming features.

“Considering this has been delayed by three months, I would have expected much more substance.

“It was hailed as a great leap forward for homebuilding in this country, but it just seems like they are promising more consultations.

“Nothing in here besides the ability to build more dense housing will assist in the short term.”

Similarly, John Goodall, CEO and co-founder of P2P platform Landbay, welcomed the paper’s efforts to increase PRS developments.

“The government has been pulling all manner of tax and regulatory levers over the last couple [of] years to professionalise the buy-to-let sector and improve standards for renters, but tenants have been hit by rising rents, just as affordability of the housing market has reached crisis levels.

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“Finally, it seems we’re seeing some cast-iron commitments from a Conservative government to improve investment across all tenures, including large-scale PRS developments that will ease rental pressure on aspiring homeowners.”

Some experts believe not enough has been done to boost home ownership

With so much emphasis on rental properties, Ishaan Malhi, CEO and founder of online mortgage broker Trussle, suggested more needed to be done to boost home ownership.

“While it's promising that we’ve seen some positive suggestions around speeding up planning and housebuilding, it's the same message we've heard many times before.

“The current generation face an almost impossible task getting on to the property ladder and this is almost entirely down to a lack of supply, leading to unaffordable homes.

“This isn't the first time that the government has put housing at the top of its agenda, but so far we’re yet to see any real improvement in home ownership accessibility.”

‘Another false dawn’

The white paper proposed greater financial support for SME builders

One measure designed to boost the supply of housing was a pledge to back SME builders through initiatives such as the homebuilding fund.

Stuart Law, CEO and co-founder of peer-to-peer platform Assetz Capital, was unconvinced by the practicality of this proposal.

“…It’s an admirable goal, but from what we hear applications are as difficult, [if not] more so, than applying to a high street bank for funding.”

Paul Goodman, chairman of the National Association of Commercial Finance Brokers, stressed the need to raise awareness of the funding on offer.

“Education has an important part to play here,” Paul stated.

“High street lenders can play a large part in funding these developments, but construction SMEs should be aware that there are a range of funding options available to them beyond just the high street.

"It’s therefore vital that the government emphasises the range of financial options available to SME builders, and that they can continue to access the finance they need to get Britain building."

Regardless, Nick Oakley, director of structured finance at Castle Trust, did acknowledge that smaller developers could benefit from a possible rise in the availability of small plots and the loosening of restrictive planning regulations.

“…At the moment, this looks more likely to be another false dawn than the answer to the country’s housing requirements, but there are at least some reasons to be cheerful for small developers.

“These steps are unlikely to provide the solution to the nation’s housing crisis, but they should at least present some new opportunities for private developers.”