A severe shortage of skilled workers in the housebuilding industry, and the current planning system, are hindering efforts to tackle the UK’s housing crisis, according to new research out today.
The first Lloyds Bank Commercial Banking report on the UK housebuilding sector, Building for Growth, analyses the state of the industry today, and the opportunities and challenges it faces in the future.
It surveyed those within the housing supply chain, from SME contractors to major national developers and found real concern among these businesses on the effect of the sector’s skills shortage – not only on individual firms, but also on national housebuilding rates and the UK economy as a whole.
However, the research did find some approval for measures announced in the Summer Budget designed to tackle the current housing shortage, for example, plans to grant automatic planning permission for building projects on disused industrial sites.
While the pace of housebuilding is generally acknowledged to be improving, there remains much discussion about how it can be accelerated to match demand. According to the report, there are a number of key issues preventing the effective tackling of the housing shortage, including slow planning decisions (46%), public opposition to development (42%) and lack of skilled workers (25%).
24% said the skills shortage is the biggest broader challenge currently facing their business. 35% believe there is a lack of suitable candidates to fill existing and new jobs.
Housebuilders said the skills shortage is most acute among electricians and site managers (both 34%), with project managers (33%), quantity surveyors (31%) and architects (31%) following closely behind – reflecting the supply chain-wide nature of the problem.
Housebuilders appear to be taking steps to redress the balance, with 31% prioritising investment in recruiting apprentices in an effort to increase the pipeline of talent coming into the industry.
When asked what one change housebuilders would advocate for the alleviation of the housing shortage, 23% said greater local authority support to promote and fund building projects, while the same figure sought additional government support.
Existing government schemes; Stamp Duty reform and the Help to Buy equity scheme; were flagged by 73% and 63% respectively as having a positive impact on the housing crisis.
Despite the challenges cited in the report, housebuilders seem to be optimistic about the future, with respondents giving an average score of seven out of 10 when asked to rate their confidence in the success of the UK housebuilding industry in the future.
87% of respondents want to create new jobs in the next 12 months, and if replicated across the industry, this could mean the creation of more than 100,000 new housebuilding roles.
Alasdair Gardner, head of housebuilders, Lloyds Bank Commercial Banking, said: “This report sheds light on the key areas of support that firms in the sector need to ensure the long-term success and sustainability of the industry. Clearly, housebuilders are very concerned about the barriers preventing them from playing a role in alleviating the housing shortage.
“Lloyds Bank is committed to helping housebuilders achieve their ambitions for growth, and meet the needs of the nation in terms of building new, affordable housing. Indeed, in January, the Lloyds Banking Group Commission on Housing launched an independent report that set out a roadmap towards the sustained supply of good quality new homes.
“Housebuilders told us that slow planning decisions are a challenge, something the commission reflected in its call for clearer targets for local authorities on planning process timeframe.
“Clearly, skills is also a huge concern for industry operators too. Our £100m Government-Lloyds Banking Group Housing Growth Partnership will be used to help SME builders invest in new projects and develop their businesses, allowing them to recruit and train the skilled workers so vital to the prosperity of the housebuilding sector, and the nation.”
Stephen Smith, director of Legal & General Mortgage Club & Housing, said: “Housebuilding is heading in the right direction, but not nearly fast enough. It’s paramount that any unnecessary hurdles are removed in the housebuilding process to allow the construction industry to ramp up housing supply. Previous changes to the planning permission process were welcome, but clearly more needs to be done to streamline the house building process.
It’s also crucial that the industry acts to encourage more efficient use of current housing stock by building more homes of the right size and in the right places. Last Time Buyers, for example, who wish to downsize to a smaller property, may be unable to do so due to a lack of suitable alternatives. More Last Time Buyers would be able to realise their downsizing dreams if more suitable properties were available on the market. This would free up larger homes for growing families, and effectively re-shuffle housing stock so that everyone has a chance to own their desired home.”