So we have a snap Election, with Rishi hoping that not only would his rivals have been slightly caught on the hop, but that voters may be more likely to turn out in some (theoretically) better summer weather.
It’s going to be a fascinating few weeks, but with a hell of a lot at stake as the country continues to battle some serious economic headwinds, and closer to home, housebuilding remains in a stubborn downward trajectory.
We have seen a small slowing of inflation, but the demand for new homes has tanked following a post-Covid surge, and until mortgage interest rates drop, many struggling with living costs won’t be looking at buying.
And then there’s the weather … well, the less said about that, the better.
Planning holds everything up, but what if many of those rules are simply not appropriate?
James Parker Managing editor of Housebuilder & Developer
Time for change?
In April the Construction Products Association forecast a recession in the industry in 2024, in the form of a 5% fall in output in housebuilding, followed by a possibly optimistic growth of a similar number in 2025, based on “real wage increases” and hoped-for lower mortgage rates.
It’s unsure where housebuilders might be in their voting mindset, now we actually are confronted with a change of administration, potentially. But a Knight Frank survey in January found, surprisingly perhaps, that 7 out of 10 residential developers (admittedly only a sample of 50), wanted a Labour administration.
Labour has promised a “blitz” of planning reform, to free up new building, but such promises have been heard so often before. Last year, Keir Starmer announced a headline-grabbing target of 1.5 million new homes, but the question is, how is hoping to incentivise the sector to deliver these, when demand is ebbing?
Joint concerns
Labour does sound (unsurprisingly) like the Tories, when it talks of boosting affordable housing, and pledges “fast-track” approval of homes on urban brownfield sites. It also seems to have a clear view on building where appropriate, i.e. where there are “good jobs and infrastructure.”
Although the Conservatives and Michael Gove have not been universally unpopular, many in the sector are still scarred from the bungled nutrient neutrality attempted implementation.
They are also concerned about the impact of the Future Homes Standard, and biodiversity net gain requirements.
These are things that have to happen, however, for our collective prosperity as a nation, and are no different from what Labour would have done.
Planning delays
Planning is the real sharp end, the time-honored bugbear of builders trying to get schemes off the ground, even once they have the commercial case to build squared off.
And planners themselves are not to blame in general, more the system where they have too much to process, in too little time, with too few people.
Planning holds everything up, but that is often its function, i.e. scrutiny and adherence with rules, but what if many of those rules are not appropriate?
In its ‘Manifesto’ for the General Election, the National Federation of Builders (NFB) attacked the recent round of planning reforms, as creating more barriers and delay, “permitting less ambitious councils to abandon robust site allocations and implement more onerous planning policies.”
This, the SME says, has led to SMEs leaving the sector, and “a considerable drop in new housing supply.”
In 2012/13, 56% of major planning applications were agreed within the statutory period, but this had dropped to a pathetic 19% by 2022/23.
A laser focus
The NFB has a long list of recommendation for freeing up planning, but sums it up by saying the next Government “must ensure they are laser focused on planning certainty, strategic planning reforms, and support for SME housebuilders.”
If it’s to be Labour, will they delve into what the industry really wants and needs, such as the much vaunted ‘grey belt’ building on urban sites which aren’t ‘green’ but currently are prohibited under green belt legislation?
One further innovation which the NFB proposes is an ‘OFSTED-like’ system to be implemented in planning departments, so that “those who fail are assisted by private planning services,” given the example of the very successful North Lincolnshire approach.”
This might not be Labour’s instinctive comfort zone, but it seems to be working, so should be considered.
Retrofit, or more accurately, ‘repair, maintenance and improvement’ is also struggling to fill the gap caused by the drop in new build, with output expected to fall by 4% this year by the CPA.
But we have 27 million homes to retrofit, if we are to hit our net zero targets.
PAS2035
As our recent round table found out, retrofit faces its own heap of challenges, with a separate retrofit sector growing as further competition to general builders, and a culture shock for many SMEs and major contractors looking at ‘whole-house’ approaches to the low energy projects that will robustly make the difference for homeowners wanting lower bills.
One positive outcome of the new PAS2035 regulations driving retrofit is that the ‘retrofit coordinator’ role which is seeing widespread take-up and concerted training efforts, might ensure that we get quality verified onsite in a whole new way, so that the poor practice of the past as shown in the Green Deal et al, is a thing of the past.
A new culture that embraces whole-house retrofit, and not buck-passing between trades, could see the traditional housebuilder having a much more quality-based, holistic role, and a provider of trusted, low energy-use homes from existing, inadequate structures.
But the economic macro-factors are going to drive the initial uptake, as ever.
The CPA is trying to put a somewhat positive spin on this gloomy backdrop, saying construction will “recover, but slowly.”
However, even this small positivity seems founded on little except hopefulness.
The next administration needs to grab construction by the scruff of the neck in order to help it out of the morass, but it also needs to put some money in its pockets, quickly.
James Parker, managing editor of Housebuilder & Developer
