Sir Oliver's interim report on house building rates
A few weeks back I walked round (and inside) some of the new housing that is up and running in Cambridge accompanying Sir Oliver Letwin, who is conducting a review on "build-out rates" for the government, and in particular is looking in detail at what stops builders building at pace once they have secured planning permission on the land.
The telling sentence in the short interim review offered to the government this week by the incredibly sharp and forensic former Minister is this: Sir Oliver states that the “fundamental driver of build-out rates once detailed planning permission is granted for large sites appears to be the ‘absorption rate’”. In other words, "the rate at which newly constructed homes can be sold into (or are believed to be sold successfully into) the local market without materially disturbing the market price.”
Sir Oliver is trying to answer some pretty technical and difficult questions, including the relationship between market sale houses and "affordable houses" and the impact on sales, and whether reducing reliance on large sites for local delivery might help, and the impact of changing the absorption rate on the house builder business model. He seems to be concluding that the more variety of options for buying a house on a site there are, the potential for quicker shifting of those houses.
What will be interesting - and indeed vital to the chances of success of the government's house building targets, is the hint that Sir Oliver will explore what is referred to as "publicly led mechanisms" for increasing variety. So a role for councils keen to play their part in building affordable houses, perhaps?