Local councils will be giving planning permission the go ahead for 400,000 new properties according to a new report by the homebuyers and solicitors adviser SearchFlow.
The report says that from September 2011 to September 2012, only 98,000 new developments were started. Moreover, when the government announced the Housing for Growth policy in early September 2012, it made light of the housing shortage throughout the UK.
This has led to experts suggesting that local councils and property developers will look for potential sites for new housing developments. If this happens, the mortgage market may see a significant boost in applications for new build mortgages.
Local councils have therefore focused on housing development as one of their top priorities. In 2011, approval of planning permission reached a 10 year high and as such created a backlog of 400,000 new homes waiting to be built. In order to get through this backlog, the government commissioned the distribution of £661 million in reward pay-out money to 353 councils across the UK. This was a reward bonus for councils building 142,000 new properties and redeveloping 13,000 previously disused properties throughout the UK.
But, the shortage of housing has remained an issue, and as a result councils are apparently cutting red tape and some restrictions in order to build more properties and ease the housing market pressure.
However, experts at SearchFlow warn that this new rise in buildings could result in property values being affected.
