13 Apr 2023

Land of Opportunity

Unlocking the Potential of Council-Owned Sites – How Nearly 1.6 Million Homes Could be Built

Housing shortages in the UK have been an ongoing issue for years and it’s become clear that something needs to be done urgently. One potential solution is unlocking dormant council-owned land, which could provide 1.6 million new homes – if suitable initiatives are put in place to support small and medium enterprises (SMEs). This article will explore how this can be achieved, looking at the challenges SMEs face, current initiatives helping local councils unlock their sites and success stories from research projects carried out by LDS.

Introducing the Problem of Housing Shortage in UK

It’s been well-documented that the UK is in a housing crisis. The latest official figures from the Ministry of Housing, Communities and Local Government (MHCLG) show that there were 74,000 new homes completed between October 2020 and December 2020 – an increase of 19% year-on-year but still below pre-2007 levels when 176,650 homes were built each year.

The data also shows that 44,000 of these homes were registered by small builders in 2007 but by 2015 this had fallen to 18,000 – demonstrating the potential for growth if conditions are right. This is especially important given the rapid population growth over the past decade; according to early figures from 2021’s census, England and Wales’ population increased by 3.5 million in the last 10 years.

Exploring Council-Owned Sites as a Potential Solution

Given the current situation, it’s clear that something needs to be done to address the housing shortage. One potential solution is unlocking dormant council-owned land which could provide 1.6 million new homes – if suitable initiatives are put in place to support small and medium enterprises (SMEs).

Council-owned sites have long been seen as a potential source of development but have been underutilised in recent years as developers have focused their attention on large-scale projects. However, with the current housing shortage, there is a need to look at smaller sites and encourage SME housebuilders to invest in them.

Examining How Much Land is Available and What it Could Accommodate

Recent research from LDS has shown that there is a considerable amount of latent council-owned land which could be used to generate 1.6 million new homes – more than enough to meet the current housing needs.

The research looked at over 10,000 sites and found that they were comparable to those owned by housing associations and private developers – in terms of size, location and amenity. The only difference is that they are council-owned, meaning they have not been used for development. It’s estimated that these sites could generate up to £1 trillion in value over the next 10 years if unlocked.

Understanding the Challenges Facing SME Housebuilders

Although the opportunity is there, unlocking these sites is not without its challenges. SME housebuilders often face difficulties accessing finance which makes it difficult for them to invest in these sites and start developing them. In addition, many of these sites are small and have complex ownership structures, meaning they are costly and time-consuming to bring forward.

Looking at Initiatives Aimed at Unlocking the Potential of Small Sites

In light of these challenges, there have been several initiatives from both the public and private sectors aimed at unlocking the potential of small sites. The most notable is MHCLG’s ‘Small Sites Fund’ which provides funding to local authorities to bring forward land for development. In addition, the government has also made £200 million of funding available for SMEs to develop small sites.

Outlining Steps for Moving Forward to Build 1,600,000 Homes on Council-Owned Sites

The research from LDS highlights the potential of council-owned sites and their ability to help tackle the housing shortage. To move forward, there needs to be a joint effort between all parties involved – government, local authorities and developers – as well as continued investment in initiatives aimed at unlocking small sites. This will enable SME housebuilders to access finance and bring forward sites to deliver much-needed homes.

By taking these steps, the UK can unlock 1.6 million new homes on council-owned sites – an opportunity too good to miss.

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