Brian Berry, CEO of the Federation of Master Builders (FMB) discusses the turbulent politics of recent months, and considers how the events will affect SME housebuilders.
What a difference a few months makes! In my October article I wrote that certainty had been restored following a prolonged summer of stagnant government. How wrong I was. We’ve had a botched budget, an ousted Prime Minister, a recession, and a new Housing Minister, the fifth this year.
So once again I say that this, the Government needs to hit the ground running. It needs to introduce bold reform on planning and increase support for SME housebuilders. It must turn around the SME sector, which is now only delivering 10% of total housing output.
HOW IS THE MARKET LOOKING?
In late November we launched our annual FMB House Builders’ Survey for 2022. This is the only survey of its kind to track the market for small, local housebuilders. What we can see from the latest survey is that old trends still prevail.
A lack of available and viable land came out as the top issue stopping SME housebuilders delivering homes, which has been the case for some years now. This was closely matched by the planning system, which even those with a glancing interest in housing will not come as a surprise. Ultimately, the Government needs to invest in supporting smaller housebuilders through the planning process.
However, new issues have sprung up, notably the availability of mortgages. This hasn’t troubled the top issues for many years. But, unsurprisingly given the economic chaos over the last few weeks, builders are clearly seeing consumers put a foot on the breaks when it comes to development funding via products like self-build mortgages.
Another issue that climbed the list is a lack of skilled labour, it was cited as the third biggest constraint for SMEs delivering housing. There has rarely been a time when skills haven’t been an issue for the industry, and it’s only getting worse. We need to see the Government tackle the problem head on, especially as construction is one of many sectors struggling for workers.
THE RETURN OF GOVE
I previously lamented that the Department for Levelling, Housing and Communities (DLUHC) never got motoring under Michael Gove as he resigned before he had the chance to deliver meaningful change. Well, now he has that chance. He can quite literally pick up where he left off; not many, if any, Ministers have been in such a position.
I want to see the Department’s output match its ambition. Gove has said some encouraging words over the last few weeks. He has in particular singled out the need for quality and diversity in housing. Who better to deliver this than local SME housebuilders as this is their speciality, they deliver quality and diverse housing for their communities.
Small, local housebuilders must be supported to deliver the ambitions of the Government; they are the ones who will use brownfield land to infill neglected sites and regenerate town centres. They won’t build cookie-cutter developments, nor will they play fast and loose with the planning system, which Gove has criticised the industry for doing.
WHAT DO WE NEED TO SEE IN 2023?
What small housebuilders do need is a planning system that helps them deliver. Greater support and guidance through the planning system would go a long way to boost the sector. Potentially even within the constraints of the current planning process, more targeted support, with dedicated planning officers, for example, would be a boon.
But for now, we wait to see what the Housing Department’s output will be. Let’s hope stability and ambition prevails. Surely, it can’t be as raucous as this year?