The Housing Forum’s Post

The Housing Forum is aware of difficulties reported around S106 where housebuilders increasingly report that they cannot find a buyer for the affordable housing. So yesterday we held a round table discussion to bring together RPs, housebuilders, legal experts and local authorities to review the issues behind RPs taking on less affordable housing through S106 and to explore what solutions there might be. A few lessons: - The decimation of RPs' capacity to invest in new housing is the key driver behind the problems. Their money is primarily going into building safety remediation instead of newbuild. - The current situation is not improving and affects all areas of England, though is worse in London, where building safety costs add further complexity to S106s - RPs who do have capacity to buy S106 sites are able to be selective and prefer to avoid newbuild homes with gas boilers or which don't really meet their needs in terms of number of bedrooms or size of rooms. - In the long-term the price of S106 sites will fall, but there remains a historic issue where a sudden drop in the price that RPs can afford leaves projects unviable. - Small sites present particular challenges as the legal work involved in agreeing the S106 can be prohibitive. Potential Solutions: - RPs prefer to work with a smaller number of housebuilders to jointly establish what they will need as building owners. This could be a formal partnership, or it might be less formal meetings and discussions. - Councils can unblock stuck sites by accepting a commuted sums in lieu of onsite provision. - Grant funding might be a solution for some larger schemes, but there is a need to be wary of this undermining the intention of S106 as providing subsidy in kind. - Flexibility over timelines can help developers to get going with the market housing while they continue to seek out an RP for the affordable homes. - Councils and RPs should work toward more productive dialogue which would help both parties, as well as helping ensure that housebuilders build what is needed. We're interested in hearing more about this issue.

Interesting read

Clearly an interesting discussion and a big issue right now. An additional solution would be for developers and house builders to get creative about different forms of affordable housing on sites or use some that have always been around - discounted sale or rent for example. Given the scale of the housing challenge all types of tenures can contribute.

The Housing Forums conclusion on Section 106 is evident from Planning Departments reporting approved planning applications, not progressing to development on site. This conclusion is further evident from the Housing Regulators recent risk profile of the sector stating both councils and RP balances sheets are cause for concern, with lenders interest cover ratios are showing signs of stress. It’s time for funding institutions to share risk to free up funding capacity, in delivery of the governments 1.5m new homes.  

How do we get more sites unlocked through the Section 106 process? Private sector housing delivery is now responsible for around 44% of all new Affordable Homes through Section 106 (S106) developer contributions. Indeed, in the past five years alone, almost 140,000 (138,606) new Affordable Homes have been delivered through private sector cross-subsidy with developers contributing around £10.8bn towards affordable housing provision, infrastructure and amenity enhancements each year. However, the future supply of this much needed tenure is under threat, with many home builders finding it increasingly difficult to fulfil their S106 Affordable Housing requirements due to a lack of bids from Registered Providers (RPs). Although this issue has been developing over several years, it has only gained significant prominence in the home building industry within the past 12 months. In response, the HBF conducted a survey in March 2024 among 13 of its members to better assess the potential scale of the problem. The results found that there were almost 13,000 (12,888) S106 units with detailed planning permission that were uncontracted.. Since then, anecdotal reports from developers have indicated that the situation remains critical. Consequently, HBF conducted a follow-up survey in October 2024 with a broader group of members. This survey, covering 31 developers, revealed the following: At least 17,432 Section 106 affordable housing units with detailed planning permission remain uncontracted. Across the country, 139 home building sites are currently delayed due to uncontracted Section 106 units. What needs to be done? Link to the wider research from Home Builders Federation in the comments...

A Comprehensive Approach to Addressing Canada’s Housing Crisis A Call for Collective Action Canada's housing crisis has reached alarming levels, surpassing those in other regions, including Europe and the United States, where interest rates have remained more stable. To effectively tackle this crisis, a collaborative effort beyond government intervention is essential. The Current Landscape: Long Wait Lists and Dwindling Housing Starts Experts indicate that wait lists for housing are becoming increasingly unmanageable, with predictions that the situation will worsen. In the Greater Toronto Area, housing starts have notably declined, exacerbating the issue. Shifting Perspectives: Acknowledging Responsibility There has been a notable shift in mindset. One expert reflected, “I already spoke to someone this morning who said, ‘We have to do something.’ It is amazing because, most of the time, it’s ‘they need to do something’—the UN, the federal government, the Canadian Mortgage and Housing Corporation, the province, and the municipality. We’re in a crisis, and collective action is necessary.” Innovative Solutions: Utilizing Underused Spaces Experts propose several strategies to combat the ongoing housing crisis. Suggestions include developing in-city brownfields, previously occupied sites, or greyfields—abandoned or underutilized commercial properties. Zoning Challenges: A Barrier to Development Zoning regulations significantly hinder the development of new housing units. Restrictions such as parking standards, lot line setbacks, and height limits create challenges for urban planners, who often find themselves constrained by these bylaws. A radical change in zoning laws is required to facilitate the construction of necessary housing units. Revolutionizing Construction: Embracing New Methods To effectively address the housing crisis, it is crucial to transform construction methods and enhance efficiency. Adopting advanced technologies and reducing labor intensity are crucial steps in revolutionizing the construction process. The integration of Engineered Building Systems (EBS Global) methods, particularly through the use of prefabricated cold-formed steel panel wall systems, offers significant advantages. Off-site construction of these metal panels can eliminate waste entirely, substantially reduce the labor force required, and bypass delays and additional costs associated with climate-related challenges. This approach allows us to "build fast, build right," ensuring efficiency and sustainability in the construction industry. LIUNA FRAMECAD FrameCADD solutions Framec Framer

A comprehensive analysis of the flaws in the so-called "Latte Line" nonsense concept reveals significant opportunities for affordable housing development in Sydney, especially for quality residential grade mid-rise apartments within walking distance of Metropolitan Sydney railway stations. The potential to create 2,000 to 7,000 mid-rise apartments per Transit-Oriented Development (TOD) site around the 170 Sydney Metropolitan Railway stations is substantial, especially considering the prevalence of single-detached dwellings in these areas. Exploring the example of Bankstown Railway station, I found out in two days of walking the proposed rezoning within a 1,200-meter radius, uncovering immediate opportunities for at least 2,000 inclusive residential grade mid-rise apartments on mostly State or Local Govt land holdings. Government-owned vacant sites and air rights, some with book values close to zero, could be leveraged for affordable housing, following the successful model implemented by the Mayor of London, which requires up to 50% of all London Council surplus land sold off suitable for residential use to be set aside for affordable housing. Furthermore, the ongoing rezoning efforts led by The ALP Minns State Govt of NSW have the potential to yield another 100,000+ mid-rise apartments across additional railway stations. This influx of supply is projected to significantly reduce the inflated prices of mid-rise residential grade apartment sites, which have been bid up in value due to poor quality investment grade high-rise apartment towers speculative developments and exceeding permitted rights; most of which are not fit for purpose speculative investment grade apartments towers only fit for demolition in many cases. The introduction of thousands of newly zoned mid-rise residential grade apartment sites into the market is anticipated to impact the values of major urban projects across Metropolitan Sydney. The Opposition party in NSW faces pressure from supporters due to concerns about market saturation and pricing dynamics; urban sites fluctuate depending on demand or economic factors, like in the case of one desperate developer with a "touch of the shorts" in tough times, we paid 30 cents in the dollar a "public tender" for two city blocks in Darling Harbour the old AMLF woolstores sorted out zoning issues resold 18 months later for a 200% margin. Addressing the shortage of skilled workers and the expensive custom construction methods currently in use, there is a call for scale-up opportunities through advanced modular construction. With over 20,000 tradies leaving NSW last year and a growing need for affordable rental accommodation, adopting innovative construction practices becomes imperative for the industry's sustainability with speed to market; our Thrive Alliance consortia members have over 100,000 major CLT urban projects worldwide. #Sydney #housingcrisis #TOD #advancedmodular

Ontario is introducing five key housing laws and regulations in 2025 to tackle affordability, streamline construction, and protect tenants and renters. Here's a quick summary: 1) Rental Renovation Licence By-Law (Toronto) – Effective July 31, landlords must obtain a Rental Renovation Licence before evicting tenants for renovations. This ensures proper permits, tenant accommodation plans, and protects tenants from "renovictions." 2) Mass Timber Buildings Up to 18 Storeys – Starting January 1, Ontario's Building Code now allows mass timber constructions to reach 18 storeys, encouraging sustainable practices and faster housing development. 3) Simplified Building Code Amendments – Ontario is aligning its Building Code with national standards, cutting red tape to make housing construction more efficient. 4) Short-Term Rental Regulations (Municipalities) – Enhanced rules around short-term rentals aim to reduce housing shortages by ensuring more homes are available for long-term tenants. 5) Expanded Municipal Rental Protections – New measures strengthen tenant rights and prevent unfair evictions, especially in high-demand rental markets. These updates reflect Ontario's focus on creating a more balanced, sustainable, and accessible housing landscape for all residents. For more details on all five changes, check out the full article below

Costs of building homes higher than house prices in 1 in 5 areas https://lnkd.in/eWUprNZn   Our new report has shown that the cost of building a ‘straightforward’ three-bedroom home is higher that home may be worth in as many as 60 local authorities.    The policy briefing has been published by the cross-sector housing body The Housing Forum and aims to help non-experts and policymakers understand the costs of building a house or flat, and those working in one part of the housing sector understand more about what affects costs in other parts.    Drawing on evidence from their members, representing organisations delivering housing across the supply chain, they shown how the cost of building a house breaks down, not including land costs.     Key findings are that:  - Construction costs for an average-sized three-bedroom semi-detached house in the easiest possible setting are estimated at £133,000.  - After adding on the costs of external works, planning, professional fees, services and finance costs, the total cost of building this house comes to £202,000.  - There are a large number of additional ‘abnormal’ costs to building a house, meaning that a more typical cost would be around £242,000. New environmental and building safety requirements such as the Future Homes Standard will mean that this cost will rise to £251,700 in the near future.    Taking into account a modest allowance for purchasing the land, even the £202,000 ‘straightforward house’ may cost more to build than it could be sold for in one in five local authority areas. The report cites improved construction standards as one of the drivers of higher costs, and notes that “there are many aspects of the costs which we cannot reduce, or which we could reduce but only at a cost to the environment which we probably don’t want to pay.”    As solutions, the report suggests measures to speed up the planning process would reduce the upfront costs, including of borrowing money to purchase land and so help bring costs down. This could be achieved via a more stable policy environment, ensuring that local authorities have an up-to-date local plan, better resourcing planning departments, and avoiding additional planning burdens without first considering the additional cost.     Reducing the costs of borrowing for SMEs, and providing demand stimulus for newbuild homes, would both improve viability to build new homes.     Most crucially, the report states the importance of ensuring that the affordable housing sector has sufficient grant funding to meet the government's housing goals. As Chancellor Rachel Reeves prepares the Autumn Statement, The Housing Forum is calling for a £4bn Housing Accelerator Fund.  

This new report reveals that in up to 60 local authorities, the cost of constructing a ‘straightforward’ three-bedroom house exceeds its potential market value. Mash Halai FRICS, Managing Director, John Rowan and Partners, commented:  “There’s no denying that the last two or three years have been challenging to navigate. With rising costs, stagnating sales values, reduced funding, inflation and interest rate rises – it’s been a perfect storm of variables that have severely impacted the residential development sector. The Housing Forum’s insightful and timely report aims to provide a clear understanding of the challenges faced by the sector and proposes what changes could be made to support it. The market needs investment and access to different funding options, not only to meet the government’s housing targets but to ensure the development of sustainable homes for all.”