Member Article

Underperforming housing market restricting North East development potential

Businesses claim the North East’s housing market is underperforming, failing to capitalise on the region’s potential to be a prime development site and deliver the number of homes required.

The North East Chamber of Commerce (NECC) and law firm Watson Burton have jointly produced The North East Housebuilding Report.

Based on a survey of businesses in the sector and the wider supply chain, interviews with a series of industry figures and stakeholders, and overseen by an expert task group, the report will lay out the contribution housing can make to the regional economy.

The full details of the survey and resulting recommendations will be unveiled at an event next week (Tuesday, December 2), although some key findings are revealed today.

When asked how the North East’s housing market is performing relative to the rest of the UK, 55% of respondents said it was either under-performing or seriously under-performing, with only 4% indicating the market to be performing strongly overall.

Breaking down the market into its public and private sector components returned similar results, with 43% and 42% respectively believing the markets to be under-performing or seriously under-performing.

Watson Burton Partner (Real Estate) and Chair of NECC Housing Task Group, Tracy Hall, said: “We conducted a detailed examination of North East housebuilding activity in our ‘Help to Buy: Boom or Bubble’ report last year.

“Since then our teams have worked closely with NECC members, held interviews and chaired numerous task groups with the vital support of those involved in the supply chain.

“The result is a cohesive and balanced set of recommendations which we will unveil next week, but what is very clear that as a region, we need to be a focus on utilising existing, and in some cases dormant, housing stock.

“Change requires buy-in and commitment from many organisations and tiers of local and national government. This report will allow NECC to campaign extensively for the region in this respect, taking the message out to key decision makers - who in turn must engage to make these changes.”

The under-supply of housing is the key indicator that a region’s housing market is not performing. In 2012/3 the North East recorded 4,090 housing completions, approximately half the number needed to satisfy demand, and significantly below the regional average of 11,800 completions.

NECC Director of Policy, Ross Smith, said: “A thriving and sustainable housing market is not simply about the number of homes provided, but also the degree to which they meet the needs and wants of customers.

“In the North East we have many unique and distinctive features that we should utilise to strengthen our housing offer. We have excellent quality of life, cutting edge energy-efficiency technologies and the ability to deliver good value for money with our housing.

“Our report clearly demonstrates that housing is pivotal to the North East economy in many ways. It supports talent attraction and retention, local communities and leisure services, boosts the local supply-chain and creates employment opportunities.

“If we are to capitalise on these opportunities, we must remove the barriers to development and deliver more of the sort of homes the region wants and needs.”