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Letwin review into house building published

The Letwin review of house building and methods to solve the housing crisis has been published.

Sir Oliver Letwin was commissioned by the government to examine what could be done to speed up the slow rate of house building on major sites, and his findings make for interesting reading.

The review calls for changes in the system to ensure new homes are released to market quicker than they are currently, as well as warnings that the skills crisis will greatly impact the ability of housebuilders to meet demand.

The study, published on Monday (25 June 2018), warns that developers are slowing the system down by limiting the number of new built homes that are released for sale at any one time, while thousands more British bricklayers need to be trained to help meet government targets.

The practice being employed by developers is designed to prevent a glut of new built homes driving down prices in the local market and is known as the ‘absorption rate’. However, the report suggests that a wider variety of choice in homes in each development would negate this impact and therefore speed up the rate at which houses are built and sold.

The report concludes that “….to obtain more rapid building out of the largest sites we need more variety within those sites”.

A shortage of skilled workers, in particular British bricklayers is also having a “significant biting constraint” on house building and following Britain’s departure from the EU, this will be exacerbated.

To meet the shortfall, and hit government targets of new homes built from 220,000 a year to 300,000, the report calls for 15,000 more bricklayers, almost a quarter of the size of the current workforce, to be trained over the next five years.

The report says: to “raise production of new homes from about 220,000 to about 300,000… the government and major house builders work together … on a five year ‘flash’ programme of pure on the job training.”

Rt Hon Sir Oliver Letwin MP said: “I would like to thank everyone who has contributed to the Review Panel’s work to date in analysing all possible reasons behind the slow build out of housing sites. It is clear that the main cause for delay is the absorption rate. We found that if house builders were to offer more variety of homes and in more distinct settings then overall build out rates could be substantially accelerated.”

Secretary of State for Communities, Rt. Hon. James Brokenshire MP, said: “We want to help people onto the housing ladder, and so I would like to thank Sir Oliver and the expert panel for their excellent work. I was particularly interested to see that increasing the choice of design, size and tenure of new homes in helping to speed up build out rates and help deliver the homes we need and communities want. I look forward to receiving the final report in the autumn.”

The government commissioned this Independent Review as part of its comprehensive plans to deliver a housing market fit for the future and build the homes that communities need. The review panel will submit final recommendations on improving build out rates in the autumn.

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