What is the housing shortage gap? This is the difference between the current housing and the number needed for everyone to have a decent home to live in, which currently stands at more than 1 million homes, according to the BBC Housing Briefing.
There is clearly plenty of demand for new homes to be built and with property providing one of the most robust and lucrative financial returns, why are the basic economics of ‘supply matching demand’ not creating the much-needed quality homes to bridge the housing shortage gap? And at the same time making developers their required profits?
Here are three ways data and technology can have a key role in creating homes:
1. Reverse the rapid decline of smaller builders
In 1987, there were more than 11,000 firms registered with the National House Building Council that built fewer than 100 homes a year (in the construction industry these are known as SME developers), in 2017 there were fewer than 2,000 small builders! Their share of new build homes has gone down from 50% to 10% in this time.
The Home Builders Federation estimated that returning to the same number of SMEs as operated in 2007 would reduce the housing shortage gap by boosting the housing supply with 25,000 homes a year. Smaller builders are also more likely to offer options such as custom-build homes and to build on smaller plots that would be economically unviable for larger builders.
The solution is to empower the SME builder with all the toolkits usually only available to the national firms who can afford internal GIS teams and large acquisitions teams.
With the continued support of HM Land Registry, Ordnance Survey, GOV.UK and others releasing their invaluable data to the mainstream market, technology and data companies, like Nimbus Maps, can democratise this data to an ever-widening community of SME developers.
With less than a day’s training, any SME developer can now unlock new and lucrative development opportunities using new methods previously unavailable to them. This creates a ripple effect as they can considerably increase their choice of projects. More projects mean they can often choose projects closer to home, use local subcontractors, reduce travel times and their costs of delivering the project. More projects, at lower costs, means more houses delivered to bridge the housing shortage gap.
Estimated housing shortage gap bridged by +25,000 per year
…empower the SME builder with all the toolkits usually only available to the national firms
2. Reduce planning delays and increase the chances of success
The Strategic Land Group, a body that assists landowners in steering the planning process, argues that the planning system is responsible for 35% of the price of a UK house
To help bridge the housing shortage gap, software and data solutions, like Nimbus Maps, have aggregated and linked historic planning application for every local authority dating back 15+ years. This enables the developer to directly compare all the planning applications, both granted and refused, for their chosen development scheme across any local authority. With this insight and a few easily learnt techniques, the builder can uncover what is and is not likely to be accepted by a local planning authority. This allows developers to establish what planning boundaries they can work within and prepare by bringing all the supporting evidence to the local planning officer, reducing their research time too.
Having these local planning precedents transparent and available to both the developer and planning officer encourages collaboration rather than friction. This significantly improves planning successes, reduce timescales and cut expensive abortive costs. All helping to bridge the housing shortage gap.
Most SME developers cannot afford to hire expensive planning consultants, often charging over £250/h, to undertake what is mainly an information-gathering exercise. Bringing this wealth of information through a cost-effective software solution like Nimbus Map is much quicker than waiting for a consultant to write a bloated, fee justifying report.
Estimated housing shortage gap bridged by +10,000 per year
… revitalise our town centres where historic uses are declining in demand
3. Make ‘change of use’ opportunities more visible
Of the 275,000 net new homes built in 2018/19, some 13% were conversions and change of use. If this were increased to 20%, it would deliver 20,000 new dwellings per annum.
Every day, through our uniquely linked data at Nimbus Maps, we uncover multiple change of use opportunities whether it’s retail to residential, offices or industrial, or one of the many others… pretty much every time we do a demonstration of the platform to a client. We practically uncover a least one new opportunity every time which can help bridge the housing shortage gap, it’s that easy!
Change of use developments has many advantages. They can often be delivered more rapidly, bring redundant space back into good use such as revitalise our town centres where historic uses are rapidly declining in demand.
Estimated housing shortage gap bridged by +20,000 per year
Wider adoption of data and technology will have a significant positive impact on bridging the housing shortage gap. Our role as a data and technology business at Nimbus Maps is to ensure the data is as good as it can be, we share everything we are learning and improve our processes so we can bring it to the widest possible community, at the fairest cost, ensuring it’s accessible to everyone.