Brian Berry, CEO of the Federation of Master Builders (FMB), discusses the latest data from the FMB’s State of Trade Survey and finds few reasons to cheer
As you will be aware, for too long we have not been building enough homes to address the growing housing crisis, resulting in overcrowding and young people not being able to afford to get on the housing ladder. The proportion of 25-34 years olds who owned a home in 1989 was 51% but that percentage figure has now fallen to just 28%. What is very concerning is that the Government lacks a clear plan to solve the housing crisis, with the result being that the housing market continues to soften, house prices increase, and more and more people are stuck in rented accommodation.
While there are plenty of complex issues holding back housebuilding, fundamentally we just need the Government to get to grips with delivery and allow more local housebuilders to deliver high quality homes fit for their communities. The Government must recommit to building 300,000 every year and give hope to both consumers and house builders alike that it is serious about increasing the supply of new homes.
STATE OF THE MARKET
In May we launched our latest FMB State of Trade Survey, which is a quarterly tracker of the SME construction market. In terms of our housing data, it unfortunately matched up with what we’d seen with other market trackers, such as the Office of National Statistics (ONS), in that it showed that the housing market is struggling. While those reporting an increase in workload had increased in the previous quarter, it’s still not a positive picture, with enquiries only moderately improved, but still very poor.
We have also for the first time started to track how many starts per quarter are being made in this survey and this will continue, so that we can build a picture of our members’ output. All this data, along with the annual House Builders’ Survey later in the year, help to build a picture of market conditions for SME housebuilders – a sector we know is not heading in the right direction, delivering only 10% of new homes compared to 40% just over 30 years ago.
The FMB is working hard to put forward a voice for our housebuilding members and is in regular contact with those responsible for housing at national and devolved government level. Given current government actions, such as the Housing Secretary Michael Gove calling in one major development for being too ‘generic’ for the area it was sited, they must start looking seriously at SMEs as part of the solution to the housing crisis. Small, local housebuilders excel in delivering high quality, diverse in design homes, far from the ‘cookie cutter’ type of schemes that we have become all too used to across the UK.
The future of planning fees is currently being considered by the Government, with a few ideas on how they’ll look recently consulted on, but one thing seems clear, they will likely be increasing. However, our members have made clear that they do not feel enough progress has been made in Local Planning Authorities regarding the speed of applications to justify a rise in costs.
There is a clear need for extra resourcing in planning teams and this is well understood by local housebuilders who are on the front lines of a creaking planning system. For many years FMB members were supportive of increases to planning fees and even championed it. But, given the poor state of the small house building market; the rise in costs from new regulations; and increasingly strained relationships with local planning teams, they do not feel a rise in fees, taken out of the pockets of small house builders, is justified. The Government must think carefully at the damage a
rise in fees may inflict on small housebuilders, and produce a meaningful plan on what support it will provide to boost their output.
Housing is clearly ramping up the agenda, it’s rarely out of the headlines. The lack of action to build new homes is seemingly filtering down into public discourse, which can often be the most potent incentive for any government to act. A bold plan going into party conferences would be nice to see, or even an outline plan ahead of the election next year, but I don’t hold out much hope. We’ll have to wait and see.