Housebuilders dismiss green arguments on affordability

In the run up to the housing green paper, which is being published later today, housebuilders have hit back at environmentalists’ claims that increasing the supply of new homes will ease affordability woes.

The Campaign to Protect Rural England (CPRE) published research at the weekend showing that the quality of the local environment rather than the overall level of supply is the key determinant of house prices.

It also says that the supply of money, in the form of looser policies by mortgage lenders and lower interest rates, has been a bigger factor in pushing up house prices than supply constraints.

And it says that a comparison of house prices and the amount of land released over the last ten years shows a weak link between the two. It says that any reduction in price resulting from increasing housing supply would be swamped by other factors.

CPRE deputy director Neil Sinden said: “We need the right kind of homes to be built and planned for including to meet the needs of rural communities. This means a significant increase in the provision of subsidised, affordable housing.”

Home Builders Federation executive chairman rejected the CPRE’s analysis. “CPRE’s research compares apples with oranges. It wrongly assumes that because land is identified in local plans that will automatically be developed.

“The choice is stark – either we release more land for development, or a generation of young people will miss out on the opportunity of home ownership.”

The green paper, which housing minister Yvette Cooper will announce this afternoon, is likely to make it easier for councils to develop housing through special purpose vehicles and smooth the release of land by reforming the regional planning process.

It will also put pressure on local authorities in the north of England to demand bigger section 106 ‘planning gain’ contributions.