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National infrastructure plan 2014: Comment

Malcolm Kempton

 

 

Malcolm Kempton, Dip (Est. Man), FRICS, is a Chartered Surveyor, RICS Registered valuer and joint business owner of Kempton Carr Croft property consultants with over 30 of years property industry experience.

 

Here, he responds to recent comments made by Danny Alexander, the Chief Secretary to the Treasury, regarding the direct commissioning of housing by central government:

Danny Alexander, the Chief Secretary to the Treasury, said the failure of private companies to meet the demand for 300,000 new homes a year had prompted the Government to adopt a radical new approach. He said: “The message to the house-building sector would be simple: if you don’t build them, we will.”

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Anybody in the property industry will tell you, it is vital to stick to what you’re good at. So the fact that the government are considering building houses directly is, I feel, a challenging idea that will be difficult to deliver successfully.

The government doesn’t have experience in building houses, so instead of claiming to be able to solve the housing crisis themselves, perhaps a better solution would be to further relax some of the more unnecessary red tape surrounding planning permission to allow existing and experienced house builders to progress developments more quickly to stand a chance of meeting house building targets.

Business model

House builders are very, very good at what they do. They are experts in running the slick commercial operation required to build. Getting the right specification and design is key and established house builders know what will work for the intended end user based on years of research and experience. Their business model fully encompasses the purchasing, consumer & technological research, planning, specification, construction and marketing processes required to deliver it.

 

Regulations and speed

How the government can say direct commissioning of housing will ‘lead to homes being built twice as fast as the conventional route’ is beyond me. Trialling the project on a former RAF base is one thing but without big changes in central housing and development policy and the ability to react quickly to any changes made, a wider government house building operation would be strangled by the same red tape and bureaucracy as existing builders, meaning they would be no further forward in meeting their own targets.

 

Infrastructure

As far as I can see, the Government doesn’t have this type of infrastructure in place, and certainly doesn’t have the money to create it. Central and local government are generally regarded as being slow to deliver anything new, so seeing this new business model required to build housing come to life will be interesting.

 

Modern residential houses

Therefore, in response to the comments from Danny Alexander, I suggest that instead of central government trying to create a new business operation that allows them to deliver housing directly, they need to make it easier for those with the skills and experience already in place to continue to do so.

 

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