Opposition housing minister Emma Reynolds told a meeting of the National House Building Council (NHBC) that a future Labour Government would require local councils to allocate more small sites for house building and offer more opportunities to smaller builders.
Her call is backed by the Federation of Master Builders (FMB) which points out that over the past 25 years small house builders have been squeezed out of the market. In 1988 two thirds of all new homes were built by SME builders, but that figure now stands at less than a third. ‘This decline has accelerated over the past five years, as large numbers of firms have either gone out of business or have diversified out of building homes altogether,’ said Brian Berry, FMB chief executive.
‘Any political party serious about tackling the housing crisis needs to get small house builders back into the market. Two barriers are preventing this from happening, lack of access to finance and lack of access to land. Until these two issues are addressed, small builders will not be able to build the number of new homes that are urgently needed to solve the housing crisis,’ he explained.
‘Housing is rising up political agenda and will be a key issue during the General Election. Everyone has the right to a decent affordable home, which is why it is encouraging that the Labour Party is actively seeking ways to achieve this. An army of small builders suggested by Labour is exactly what is needed to boost housing supply and help provide more choice in an overpriced and constricted housing market,’ he added.
In her speech Reynolds said that for previous generations, owning a secure and affordable home was an ambition that was within reach and home ownership became widespread. ‘But for many young people of this generation, and for the next generation that follows, owning your own home is now an ambition that is out of reach even if you work hard and have a decent job. This is not sustainable,’ she told the meeting.
She claimed that the current government has presided over the lowest levels of house building in peacetime since the 1920s. ‘It is clear that the Government is in denial both about the scale of the housing crisis and its own failure to tackle it. As currently structured, our country’s building sector has a broken gear stick. When the time comes to shift up a gear our house building industry is found wanting,’ she said.
‘Over the past 30 years we have been consistently out built by our international competitors. France has a similar population but is building three times as many homes. Canada has half our population but is out building us by two to one. Japan has twice our population but is building ten times as many homes, building over 90,000 homes in November alone,’ she pointed out.
Reynolds told the audience that while big volume house builders have an essential role to play, there needs to be greater competition and diversity. ‘Building those extra homes could bring up to 230,000 jobs to our construction industry and I want to see many of those jobs created by small and medium sized builders,’ she said.
She believes the answer could like in what is termed ‘custom build’. ‘It gives power to aspiring buyers and allows a local approach to planning helping to increase design quality and reduce community objections to new homes. Custom build doesn’t mean building the whole home yourself, it can be like choosing a kitchen,’ said Reynolds.
She gave as an example a new scheme in Lewisham, London, where the local council is running a custom build scheme that allows the residents to choose the design, select the contractors and specify individual requirements and in Oldham, greater Manchester, the council has bought and cleared the land for a custom build scheme that will deliver homes at 20% less than market value.
‘We know that one of the key barriers for small and custom builders is access to land. That is why we need a package of measures to assemble an army of smaller firms and custom builders to tackle the housing shortage and help the next generation on to the property ladder. The next Labour Government will require local authorities to include a higher proportion of small sites in their five year land supply,’ she explained.
‘We will give guaranteed access to public land to smaller firms and custom builders. And we will ensure that any public land given over for house building will have a proportion dedicated for this purpose. In addition, we have affirmed our commitment to building a new generation of New Towns and Garden Cities. A proportion of the homes built in these new settlements will be built by smaller firms and custom builders,’ she added.
She also wants to increase transparency in the land market by ensuring that developers register the land they own or have options on.
