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Woolley’s weekly round up – Friday 25 September

In news this week Brandon Lewis has announced that the government is targeting to build 1 million houses by 2020. Some have called this ambitious, which is correct to say the least. It has been generally accepted that there needs to be circa 220,000 homes built per year from 2012 -2022 in England. In 2007 the Government set a target of 240,000 homes to be built per annum by 2016, a goal that hasn’t been met. Agreed this has not been achievable due the recession which crippled the industry. To make up the housing shortage figures in the next 5 years is a very hard target to make, considering many developers and planners say that the planning system needs to be sped up.

Over the period from 2012 to 2015, circa 500,000 houses have been completed. Using the figures from the Department for Communities & Local Government housing projection report, England need to build well over 1.5 million houses in the next 5 years to come close to be meeting the original 2007 target.

Furthermore, a brand new report called Building for Growth has been published by Lloyds Bank, designed to provide a comprehensive overview of the issues facing the housebuilding industry today, as well as its outlook for the months and years to come. The report cites that one key issue facing the housing industry is the lack of skilled labour, with 24% of the companies ranging from small to large house builders stating that lack of skilled labour is the biggest challenge to their businesses. The report also states that 87% of housebuilders plan to increase the size of their workforce in the next 12 months. This is encouraging in more ways than one as it suggests that the construction/housing industry is on the up, bringing much needed houses to the market, creating tens of thousands of jobs and generating further economic growth.

All the above sounds great, however, it does make me wonder what the developers were doing throughout the recession. It has been well documented that through the recession housebuilders were hit very hard thus building a low number of houses and therefore not needing the large scale of their labour forces, which is understandable. But the lack of forward thinking of some of the housebuilders is shown here. Was there no thought that one day the market would pick up again and skilled labour would be in demand? Developers may have bought land at commendable prices to bank for the rise in the property market again but, it seems as though they did not consider their labour force. It would have been nice to hear that worthwhile investment was made in apprentice/academy schemes so that there would be a continuous flow of skilled labour ready for the ‘boom time’.

The Government target of a million houses by 2020 could have been more easily achieved if a longer term view had been taken by the industry as whole.

Simon

Author: Woolley
Published on: Friday, September 25th, 2015
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