Recommendation 7

Most homebuilding is currently done by private sector builders, primarily the larger organisations. Homebuilders have been criticised for not building homes at the socially optimal rate, which they have said is because of high costs (some caused by government policies) and a weak market for new-build properties, and ultimately underpinned by their need to remain profitable. This means developers can take a long time to build out sites, even when planning permission was granted some time ago. Nevertheless, we believe that the homebuilders are valuable partners in delivering the necessary new homes that are needed, and we agree with the Minister for Housing and Planning that this is not an indication of bad behaviour. However, when the framework and economic model of private sector homebuilding constrain builders from building at their maximum capacity or at the socially optimal level to maintain their profits, then that framework and model are wrong and must be changed. We are glad to hear that MHCLG is considering transformation to address this issue, as nothing less is likely to be adequate. The Minister did not give us much detail 54 of what such a transformation will look like and how it will be delivered, so we would welcome more information in response to this report. Reform of the planning system alone will not address the affordability of housing. (Conclusion, Paragraph 51)