James Parker looks at whether we should be optimistic or pessimistic about the decade ahead

For some, the dawning of a new decade almost instinctively provides a spur to optimism, and a feeling that there is a renewed sense of purpose across the board.

However, with recent events such as the General Election (a second and more conclusive Brexit referendum in effect), continued evidence of climate change’s destructive power in Australia, and America’s return to warlike tendencies in the middle east, reasons to be cheerful, never mind optimistic, seem thin on the ground.

Will we just get warm words about design quality?

James Parker James Parker Editor of Housebuilder and Developer

Housebuilding

For the housebuilding sector, business will continue much as normal however.

With demand showing no signs of abating – despite the fall in prices in areas like London – housebuilders’ main enemy remains the sluggish planning system when it comes to getting the right homes built on the right sites.

Cynics may say it’s not in their interests to build out sites any faster than their bank balances prefer – with an uneven supply-demand ratio helping drive prices upwards.

However, builders need to build in order to be in business, so a balance between building everything possible and building only the bare minimum is probably where the true picture lies.

Flatlining

For Andy Sommerville, of influential property data firm Search Acumen, the common theme for housebuilders from late 2019, which will lead into 2020, is inertia.

In December, Sommerville wrote: The end of the decade can’t come soon enough for those in the housebuilding trade.”

He pointed to the rates of planning applications “flatlining for nearly a whole decade” as evidence not only of the lingering effects of the 2008 financial crash, but also “destructive political wrangling over Brexit.”

Of course that’s far from over – as the UK government embarks on attempts to sign a “good” trade deal with the EU in a year (surely one of the most ambitious projects mankind has yet attempted), that wrangling is only going to redouble. 

However, now there’s effectively no political opposition, so the real wrangling will largely be taking place behind closed doors and in sweaty rooms in Brussels and London.

Government officials will be as likely to be arguing between themselves as with their EU counterparts.

Land banks

Sommerville also said that the industry itself was partly to blame for that inertia, however he didn’t go into details – could he be alluding to the likelihood of major contractors sitting on large sites, waiting for the absorption rate to be to their liking?

Some have posited this as a major issue that must be unlocked.

Oliver Letwin, in his 2018 report on this issue, suggested a nuanced issue at the heart of this, that the ‘identikit’ nature of many developments was slowing the absorption rate, therefore in turn slowing build out. It’s self-evident that something needs to be done at either end of this seemingly intractable issue.

Intervention

The final report of the Government’s Building Better, Building Beautiful Commission is now expected – will that outline firm measures on how design quality will be brought to the fore in new housing developments?

Or will it be some warm words about its ‘importance to communities?’

Until there is firm intervention (and despite the naysayers, Johnson’s Government has made noises about wanting to intervene positively in industries where needed), very little is likely to change.

Fresh start, new thinking

Let’s not be dragged into cynicism, as Search Acumen’s Sommerville says, “instead of wallowing in gloom, we should look to the 2020s as a chance for a fresh start and some new thinking.”

While this may sound like a cliché, if we genuinely applied a fresh, and possibly even top-down approach to housebuilding where needed, we might see some structural change.

Sommerville points towards how local authorities are collating data on brownfield sites as evidence of “renewed energy on digitalisation,” and says that the right kind of financial incentives and a “tech positive” attitude could see the construction sector reap the benefits this decade.

There could be a new kind of housebuilding in the UK – more demand-led, without slavishly waiting for that demand to put its hand in its wallet, as well as tough Government intervention to free up the small sites as well as housebuilders need.

Otherwise, brace yourself for more inertia. 

James Parker is editor of Housebuilder and Developer