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21,000 new homes a year – how near can we get ?

21,000 new homes a year – how near can we get ?. Jim Preston Chair of Homes for Scotland & Managing Director Veitchi Group. Content. The current housing crisis Help to Buy (1 & 2) MI New Home Building the rented sector Housing output challenge. The Housing Crisis.

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21,000 new homes a year – how near can we get ?

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  1. 21,000 new homes a year – how near can we get? Jim Preston Chair of Homes for Scotland & Managing Director Veitchi Group

  2. Content • The current housing crisis • Help to Buy (1 & 2) • MI New Home • Building the rented sector • Housing output challenge

  3. The Housing Crisis • General Registers of Scotland estimate that 465,000 new homes req’d by 2033 • (c.25,000 pa) • 14,881 completed in 2012 (lowest since 1947) • 42% fall from 2007–2012 • How quickly can output be increased?

  4. The Housing output challenge Average historic growth rates by decade: 1950’s c. 20% pa post-War housing boom 1960’s 3% pa 1970’s 7% pa strong shift to owner-occupation 1980’s 3.2% p.a. 1992 – 2007 2.7% At 5% compound growth - takes 7 years to hit 21,000 target annual levels (or 11 years for 25k)

  5. Help to Buy (Scotland) • Launched 27 September, open to customers 30 September • £220million over 3 years • Key parameters

  6. Help to Buy (Scotland)Monitoring & Exit • Monitoring structure in place • Economic impact to be measured Site openings/sales activity Employment/apprenticeship creation Access to development finance • Exit….must be considered now!

  7. HTB 2: Mortgage Guarantee Scheme • Available across the UK from January 2014 • Price cap of £600,000, all market • Range of LTVs from 80 to 95% • The government and the bank jointly guarantees up to the next 15 per cent of the property’s value • Fee paid for by the lender • Lender appetite???

  8. MI New Home Launched September 2012 26 Builders, 3 lenders, Over 500 completions since launch

  9. HFS Research project, supported by Scottish Government & Construction Scotland • Exploring ways to bring institutional investment to Scotland • ‘Generation Rent’ – choice/alternative to buying • Adding to total number of new homes being built • Promoting quality in design and management

  10. The Housing output challenge Continued problems with… • Stalled or non-viable sites • Infrastructure • Developer Contributions • Planning process • Development Finance (SMEs) • Meeting tougher technical requirements

  11. The Housing output challenge Fresh (or resurfaced!) challenges…. • Skills & Labour • Materials “I’ve been surprised by pace of shortages …brick, roof tiling and labour…we have significant challenges ahead”

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