We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Nikodem Szumilo, a professor of construction economics at UCL, has told Express.co.uk planning regulations are more restrictive than a rise in the cost of building homes. He added that the war in Ukraine was unlikely to affect the UK property market drastically, but sanctions against Russian oligarchs meant “wealthy individuals who want to hide their assets in London are now going to think twice”.

England alone currently needs to build 340,000 homes a year to tackle the housing crisis, according to a report commissioned by the National Housing Federation.

The Government is aiming to build 300,000 new homes by the mid-2020s, but in the last two years less than 250,000 homes were built per annum.

The UK is also seeing a historic rise in inflation due to the coronavirus pandemic, which has seen higher costs of raw materials, fuel and energy.

These higher costs, along with supply chain issues which arose last year, mean construction has become costlier.

However, Dr Szumilo said: “The major reason we don’t have enough housing supply in the UK is not the cost of construction, but planning regulations.”

He explained the costs imposed by complying with often stringent planning regulations makes building houses burdensome.

Dr Szumilo said: “We have a housing crisis in the UK, not necessarily because we don’t have enough houses in general, but because we don’t have enough houses where people want to live. There are plenty of cheap houses around the UK.”

But, “in places where [the number of] houses are the highest, planning regulations are the strictest.”

He added: “This is the major limitation of housing supply in the UK. It’s not the cost of raw materials or labour […] it’s mainly the cost imposed by planning regulations.”

A recent report on the construction market by the Chartered Institute for Procurement and Supply stated that, in February, domestic construction overtook commercial construction.

This could suggest the UK might expect a crop of new housing to help stem the housing crisis in the near future.

However, Dr Szumilo suggested it might not be as simple as that, and with rising inflation new homes might be less affordable for people with less to spend.

DON’T MISS
P&O’s sacked staff refusing to leave ferry [REPORT]
NHS Trust under fire for ‘speak English only’ instructions to staff [INSIGHT]
Putin invasion in tatters as Russian tanks decimated [ANALYSIS]

He said: “The commercial real estate market is going through dramatic change at the moment.

“We don’t know what is going to happen; we don’t know how people are going to use offices going forward. We don’t know if the market is oversupplied; we don’t know if we have too many shopping centres – we probably do have too many offices.”

The sanctions against wealthy Russians in response to the war in Ukraine would have an effect on demand in the “prime” market, Dr Szumilo said, “but doesn’t really affect the rest of the market”.

While the sanctioned assets are frozen and cannot be sold, others looking to invest in the prime UK property market may be deterred by new regulations expected to be brought forward by the Government.

Dr Szumilo said that large influxes of refugees had typically driven house prices up in places like Europe.

He noted that the population of Warsaw had grown by 15 percent in the first few weeks of the invasion according to the city’s mayor.

However, he told Express.co.uk his family in Poland had said many refugees were staying there rather than moving on to another country as it was close to their homeland.

As such, it is unlikely that Ukrainian refugees would make the UK’s housing crisis worse.

Dr Szumilo said: “The number of refugees coming to the UK is a drop in the bucket when it comes to demand.”

Source: Read Full Article