The house building industry has welcomed the announcement of a £7 billion fund to prioritise home building with 200,000 starter home with 20% discount for those aged under 40, 135,000 shared ownership home, 10,000 rent to buy homes and 8,000 specialist properties for the elderly and disabled.
But the Federation of Master Builders (FMB) pointed out that already developments are being stalled or held up due to the cost of hiring skilled tradesmen and with a shortage of apprenticeships the skills problem is not about to go away.
‘Unless we see a massive uplift in apprenticeship training in our industry, there won’t be enough pairs of hands to deliver more housing on this scale. The Chancellor clearly recognises that the crisis of home ownership is inextricably linked to a crisis in house building. We therefore hope that in order to address both, the Government will do everything it can to increase house building capacity,’ said Brian Berry chief executive of the FMB.
‘SME developers will have an important role to play in delivering the smaller scale sites across the country. The last time we built in excess of 200,000 homes in one year was in the late 1980s when two thirds of all homes were built by small developers,’ he pointed out.
‘SME house builders now only build little over one quarter of all new homes which points to another serious capacity issue as we need more small house builders to enter the market and also for SME house builders to crank up their delivery of new homes in order to build the Chancellors 400,000 new affordable homes,’ he added.
There was much in the Autumn Statement for the construction industry to be excited about but some of the fundamental barriers to house building and, in fact, construction of any kind, remain in place, according to Simon Craven, director at Tower8.
‘If we are to see spades in the ground, then we need to see more of skilled workers to deliver these grand schemes. Further funding for a skilled workforce is required if the construction industry is to match the potential projects that the Chancellor is so keen to encourage,’ he explained.
‘Pressure on the construction industry comes from project costs such as staffing, materials inflation and other key factors that affect delivery. The Chancellor has left many of the problems of supply side and skills to the private sector to resolve which is a potentially exciting move. But the grey area occurs where the private sector works with local authorities, planners, education and divergent goals between these parties mean that the progress required is simply not made,’ he added.
'Furthermore, we have been interested to speak with many of the firms that are looking to deliver PRS schemes in the coming years. And the reality is that the Chancellor’s announcement will make them extremely nervous despite his promise that the details have now been resolved on his increase in Stamp Duty on buy to let properties. It is naïve to assume that home ownership alone is the key to reducing housing costs for Britain. The rental sector must be seen as a viable alternative, as it is in so much of the rest of Europe, and placing barriers to a sector that has traditionally struggled to attract corporate investment would be a lasting mistake,’ he concluded.
Steve Perkins, director of urban development at global construction consultancy Turner & Townsend, believes that it will now be easier for developers to get both the money and the land they need to build.
‘But there is still the awkward question of what will happen when the surge of new building unlocked by these measures collides with the lack of capacity, both in the construction industry itself and in the planning process,’ he said.
‘As demand from developers increases, the shortage of skilled workers is likely to drive up construction costs, and stretch planning authorities, already pared back by local government austerity, to the limit,’ he pointed out.
‘Britain’s construction industry has already made great strides in increasing levels of housebuilding, and while these measures will give it a much-needed stimulus, they don’t remove all the structural barriers that have for too long prevented it from meeting demand,’ he added.
