Featured in Property Week
The recent findings by the Institute for Public Policy Research (IPPR) highlight that over 1.4 million homes have remained unbuilt since 2007, despite having secured planning permission. While it is easy to point the finger at developers, this news ultimately underscores the multifaceted challenges we face in delivering much-needed housing.
I need to make it abundantly clear that where land banking is happening, it is typically only large plc developers – with significant resources – that are doing so. For the likes of small and medium sized enterprises, the types we deal with on a daily basis, the cost of sitting on land while your loans are accruing rising interest simply isn’t viable. SME developers want to get stuck in and build quickly, because if they don’t they are losing money.
But for those that are guilty of land banking, we support the IPPR’s recommendations to address these issues. Implementing laws that require developers to commence construction within a specific timeframe after securing permission is a sensible approach and will help to give certainty to everyone, from developers to local communities.
Additionally, the creation of a new Cabinet team to oversee land use and tackle development blockers is a step in the right direction. Such measures would ensure that the planning system functions more effectively and that developers are held accountable for their commitments.
But arguably one of the biggest barriers to delivery post-planning is the UK skills shortage, which is reaching a critical point. Ultimately, developers can’t develop if there is no one to build things out, be it in their own workforces or the contractors they employ – many of which have gone under in the past 24 months. According to latest CITB research, the UK construction industry needs an additional 251,500 workers by 2028 to meet expected levels of work. This translates to an annual requirement of around 50,300 new workers.
I believe we need a major joined up public-private campaign to encourage new entrants to the sector, so that we can train and skill up the workforce to ensure that in years to come we have a strong pipeline of people who can actually deliver. This should include subsidies and grants as part of the incentive package.
It’s also impossible to ignore the rise of MMC, which can create efficiencies and reduce the amount of workers needed. However, to date that industry has been heavily affected also, so we need real support from both private and public partnerships.
If we tackle the skills challenge, other aspects should fall into play.
