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From Javid and Barwell paper calls for regulatory freezes to tackle housing crisis

How could the housing paper's recommendations affect the Secretary of State for Business and Trade?

Possible What happens if… A possibility worth considering, not a forecast.

Regulatory burdens identified in housing paper threaten construction sector viability The housing paper, developed by Gavin Barwell and Sajid Javid, identifies that many housing schemes with planning permission are unviable due to rising costs. The report states that building an average new home is £76,000 more expensive than it was five years ago, with half of that increase attributed to regulation, policy, and tax. This erosion of developer margins, exemplified by a 300-home Build to Rent scheme losing £6m instead of making £8m, directly impacts the operational viability of the construction sector, which falls under the purview of the Secretary of State for Business and Trade.

Reported by 1 independent outlet Written Oct 18
Effect
Strong negative
How direct
Brind's reasoning
When
Within weeks
The story
Gone quiet

How it reaches Secretary of State for Business and Trade

Reported by news outletsBrind's reasoning

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The facts so far

As reported. Each one links to where it comes from.

  • Building an average new home is £76,000 more expensive than it was five years agocityam.com
  • Half of the increased cost is due to regulation, policy and tax such as the Future Homes Standard and nutrient neutralitycityam.com
  • A 300-home Build to Rent scheme that would have made an £8m profit in 2020 would now make a £6m losscityam.com

Why it matters

The housing crisis is described as having been building for the last 50 years, affecting millions of young people denied home ownership and families stuck in temporary accommodation. The viability of the construction sector is critical to addressing this crisis, as the paper notes that boosting demand without increasing supply will not solve the problem.

This issue is part of a broader political discussion regarding economic growth, as the paper was set up by Prosper UK to develop ideas for economic growth. The recommendations include a freeze on new regulatory burdens for at least three years and reforms to Section 106, indicating a potential shift in government policy priorities regarding business regulation.

What we don't know yet

  • Will the Secretary of State for Business and Trade adopt the paper's recommendations for regulatory freezes or Section 106 reform?
  • How will the proposed shared equity scheme be funded and implemented?

What would change this answer

The Secretary of State for Business and Trade announces a review of regulatory burdens on housingThis would increase the certainty of the effect, suggesting a move toward the paper's recommended freeze on new regulatory burdens.
The government rejects the paper's recommendations for regulatory reformThe negative effect on developer margins and construction viability would become more certain and potentially stronger.

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Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.