Over 24 hours on from Chancellor Phillip Hammond’s Budget announcement, we gauge the reaction of a cross section of the construction sector with very mixed results.
Chris Edginton, Sales and Marketing Director at Bellway Northern Home Counties:
“Increasing the supply of new homes is essential to keep pace with the demands of a growing population. The pledges in the Budget should give people confidence that the support is there to help them buy their first or next home. “Housebuilders of all sizes will welcome the package of measures designed to increase productivity. Now we need to see these measures implemented as quickly as possible so we can continue to deliver the homes which are so urgently needed.”
Rico Wojtulewicz, Senior Policy Advisor for the HBA:
“Big announcements on housing have come and gone, as have their promises. However, this budget tackles some of the nuanced conversations that the industry has been having with the Government over the last couple of years. “The register of planning permissions, increased allocation of small sites, consultations dealing with the reality of delivering homes, and lifting the housing borrowing cap are the headlines we are focussing on. Just like the Housing White Paper, we see this as another example of the Government taking on board the opinion of those who actually build the homes we so desperately need.”
Brian Berry, Chief Executive of the FMB:
“The Government has set itself a new target of building 300,000 new homes a year by the mid-2020s. And today the Chancellor has put small and medium-sized builders at the heart of ambitious plans to tackle the growing housing crisis. The Chancellor appears to be putting his money where his mouth is with the announcement of £44bn of capital funding, loans and guarantees. In particular, a further £1.5 billion for the Home Building Fund to be targeted specifically at SME housebuilders can play a significant role in channelling crucial funding to this sector. A £630 million fund to prepare small sites for development and proposals to require councils to deliver more new housing supply from faster-to-build smaller sites will provide opportunities to boost small scale development.
“A second major challenge to getting new homes built is the skills crisis we face. In the long run, the only real solution to chronic skills shortages will be a major increase in the training of new entrants into our industry. We are therefore pleased to hear the Chancellor has today committed extra resourcing to training for construction skills. With Brexit round the corner the next few years will bring unprecedented challenges to the construction sector. The Government will need to make sure that the sector continues to have access to skilled EU workers, but we are pleased that the Chancellor has today listened to the needs of SME builders.”
Stephen Stone, Chief Executive Officer of Crest Nicholson:
“Crest Nicholson welcomes the Chancellor’s recent commitment to provide an additional £10bn to support first time buyers via the Government’s successful Help to Buy Scheme. This positive investment, along with the removal of Stamp Duty for first time buyers on properties up to £300,000 and the exemption on the first £300,000 of a £500,000 property in high-value areas, is a necessary step to help tackle some of the challenges facing the UK housing market.
“The Government’s support for the housing sector is encouraging news and the Chancellor’s complete funding pledge of £44bn to the industry, will see more jobs created to help tackle the chronic skills gap in the industry. House builders must now build on this momentum to create more exciting career opportunities and attract the best young talent into an industry which has so much to offer.
Graham Hickson-Smith, Commercial Director at 3DReid:
“It’s good to see the government taking the housing crisis seriously with the final quarter of the speech devoted to this one subject, an impressive commitment to extra spending of £44bn over five years and the headline grabbing finale of the reduction in stamp duty. The devil though will, as always be in the detail. The lifting of HRA caps is good in principle but there are no details at all, while the £34m for skills training sounds like a drop in the ocean when we are faced with a huge likely loss of construction workers post-Brexit. Other measures announced include the review to be chaired by Oliver Letwin which may, helpfully, lay to rest the myth that land banking is a serious problem – most developers being concerned to turn over their capital as fast as possible rather than tie it up in dormant sites. Finally there is the reduction in stamp duty for first time buyers, which will undoubtedly appeal to younger voters, but the same measure would probably be much more effective, economically, as an incentive to retired people to downsize, releasing under-occupied houses into the market.”
Richard Morton, Richard Morton Architects:
“We really welcome the Chancellor’s moves to boost the supply of badly-needed new homes. Policies which aim to lower the cost of land and bring forward more building sites, particularly in urban areas well served by public transport, are good news – and preferable to policies which make it easier for some people to afford high house prices. But all of this new housing needs to be sustainable, in environmental terms, and here the government’s policies are seriously lacking. It wants five new garden cities, but has said virtually nothing about what defines them. The Budget has not addressed the critical need for green and low-carbon infrastructure and low-impact homes, not just on green fields, but everywhere. Nor has this budget addressed the need to upgrade and retrofit millions of our existing energy-inefficient homes.”
Dan Labbad, CEO of International Operations at Lendlease:
“The Chancellor’s commitment to provide £44bn to support the housing market over the next five years is a much needed and welcome move, which represents an important step forward in getting Britain building. However, if we are to genuinely tackle the UK’s housing shortage, business, communities and Government all need to find ways to work together more collaboratively. One way of doing this is through new forms of partnership between the public and private sectors. Working in partnership is key to unlocking large, complex and diverse housing opportunities, ultimately creating the type of places where people will actually want to live and work.”
Kenny Ingram, Global Industry Director for Construction at IFS: “It’s encouraging to see that the government is planning to invest £30m to boost digital construction skills. It’s been the number one obstacle holding construction firms back from success, according to the latest Digital Change report. While this investment is a positive step forward, it cannot be used to innovate just for innovation’s sake. In order for the construction industry to truly transform these funds needs to be used to solve the underlying problems facing Britain’s construction sector such as access to technology, talent and opportunities for growth regardless of size.”
John Elliott, Managing Director of Millwood Designer Homes:
“I was delighted to hear many of the announcements made in Chancellor Philip Hammond’s recent Budget, and was pleasantly surprised at the announcements for the housing market and the goal of making the ‘dream of home ownership a reality for all generations’. The Help to Buy scheme has been extremely effective and successful, helping over 320,000 people to buy a home. The key to this scheme is that it is secured lending. Unlike student loans which may not get re-paid, the Help to Buy product is ultimately a second mortgage, ensuring there is no drain on the public purse. This is excellent news and I am delighted the scheme has been extended.”
Martin Walshe, Head of New Homes at Cheffins:
“To rebalance the supply vs demand equation and fill the deficit of homes to a level where prices will be readjusted will take years. The promise of a £44bn investment for the housing market and increased freedom for housing associations to build more homes ought to help with delivery, but the proof will be in the pudding as to how many new homes are created for first time buyers. The government has increased the housing budget to deliver a 300,000 more homes with a large swathe of affordable properties within in the mix. However, housebuilding targets have not been met by successive governments for decades and the reality is that the market needs to provide the right homes in the right places at prices which people can genuinely afford.
“On a macro level, the question here really is whether the Housing Association model works when it comes to affordability. There needs to be an element of analysis and accountability held against these promises which will need to be reviewed on a regular basis. Whilst public sector land has been released and there are new financing options and support for small and medium housebuilders, these need to work hand-in-hand with local governments and councils to ensure the delivery of the homes which are so desperately needed. Focus will be on urban and brownfield sites, which is welcomed in protection of the Green Belt.”
James Knight, Head of Residential at Arcadis:
“The gap in numbers between planning permissions and housing starts is often down to additional red-tape and bureaucracy created in Section 106 agreements and pre-commencement conditions. The government needs to focus on reducing this burden. Equally, the problem with the abolition of stamp duty is that it could maintain and increase house prices – is this fixing the market?”
John Newcomb, Chief Executive of the BMF:
“The BMF is pleased that the Chancellor acknowledges the profound need to deliver and build new homes. This needs to be an unflinching, unrelenting determination by government at all levels to narrow the gap between housing demand and supply. We also want to see the Government press ahead with its proposals contained in the Housing White Paper, as this will bring a welcome boost to housebuilders.
“Access to finance, available land, more SME builders, sclerotic planning approval, slow build-out rates, over-stretched local authorities, brownfield versus greenfield, and residents’ resistance, must all be confronted and resolved. However, we welcome the new money that has been found for the Home Building Fund, for small sites, and for construction skills. In addition, we are pleased to see the lifting of the cap on Housing Revenue Accounts for Local Authorities and the immediate scrappage of stamp duty for many first-time buyers.”
Mark Robinson, Scape Group Chief Executive:
“The only way to deliver 300,000 homes a year is to get local authorities and housing associations building as well as the private housebuilders. By lifting the HRA cap in high demand areas, the Government has finally begun to give councils better access to finance so that they can borrow to build affordable homes. We need a revolution in council housebuilding, and finance is the main stumbling block. If given the right resources and powers, local councils can serve as the engines for housebuilding in their communities.
“The challenge now on housing is how quickly can they be delivered? Once again the Chancellor has also set out ambitious plans for further reform of the planning system, and this will put yet more pressure on local authorities to deliver permissions. However to achieve this they need to be properly resourced and will only succeed if the authorities facing the greatest pressure receive more funding for their planning departments. Greater use of modular and offsite housing solutions will be an essential part of increasing output, but there was no mention of this today which is a missed opportunity. New funding for training for the construction sector is a positive step forward and vital for industry capacity, but the £34m earmarked today is unlikely to be enough given the sheer scale of the skills crisis in the industry.”
Richard Beresford, Chief Executive of the NFB:
“The budget shows that the Government has listened to the construction industry when it comes to solving the housing crisis. Although there is much more to do, we look forward to work alongside the Government in enabling construction SMEs to solve Britain’s housing crisis.”
Ian Fletcher, Director of Real Estate Policy at the British Property Federation:
“The housing crisis didn’t happen overnight and won’t be solved in a day. We welcome the commitment from the Chancellor today to long-term solutions, and actions that seek to take that commitment forward. What excites us is the commitment to infrastructure, the opportunities that places like Oxford-MK-Cambridge will provide, and the more flexible use of government support through measures like guarantees, to support housing delivery.
“The new ‘Homes England’ will have a central role in increasing delivery and it is vital it gets the support of public and private sectors, if all our aspirations are to be met. We have promoted three year tenancies in the Build-to-Rent sector and will therefore be engaging positively in providing tenants with that choice via the promised consultation.”
Lea Karasavvas, Managing Director of Prolific Mortgage Finance:
“Primary school children have taken a Stamp Duty bullet so millennials can get on the housing ladder. It is uncharacteristic of the Chancellor to kick the can down the road like this, given how much he has stressed in the past the importance of not saddling future generations with the cost of solving society’s current problems.
“The whole point of the housing crisis is that demand is too high relative to supply. Fiddling with the economic stop cock by effectively handing out free money only exacerbates the problem and won’t help buyers, brokers, lenders or sellers in the long run. Businesses and markets function best when they’re not caught in a boom-and-bust cycle and that’s what we’re all stuck with.”
Jeff Knight, Director of Marketing at Foundation Home Loans:
“Of all the announcements to be pulled out of the red box this time round, the abolishment of stamp duty for first time buyers was one of the most highly anticipated. Now confirmed, it will certainly inject some more momentum into the purchase market and give those starting out a leg-up in the face of increasing house prices. However, maintaining the current rate of stamp duty for landlords will naturally cause them to ‘batten down the hatches’ and protect their income. A quarter of landlords said they would increase rents next year if there was no change in this policy – unsurprising given the raft of changes to buy to let.
“In reality, the commitment to building more homes and addressing planning regulation is what we needed to address the supply and demand imbalance, but affordable homes do not have to equal ownership and there should also be a focus on developing good quality, affordable homes that can be rented. Doing this will not only support tenants while they save for a deposit, but will further open up PRS to the more motivated, professional landlords who can inject fresh energy and ideas into the market.”
Steve Cooper, General Manager UK & Ireland, Aconex:
“It’s great to read about the government’s vision to build 300,000 more houses in UK each year as a major step in tackling the country’s housing crisis. The construction sector will rise to this challenge but it’s vital that this wave of new housebuilding hits tight budget and timing targets as this has been an enduring problem for too long. Specifically, a national programme of new housebuilding needs to take account of how the sector must continue to work at overcoming problems of low productivity and build quality.
“Achieving the Chancellor’s vision will require more construction organisations to embrace how the latest digital innovations in collaboration, on & off-site fabrication, project control and supply chain management can transform the construction process, reversing what have been the accepted norms of construction projects shooting overbudget and coming in late. As the government does in other parts of the economy, greater digitisation across all facets of the construction sector, small and large, should be encouraged, especially when the sector is being asked to enable more citizens to get the homes of their dreams sooner rather than later.”
Blane Perrotton, Managing Director of Naismiths:
“The Chancellor presented a multi-faceted strategy for tackling the housing crisis, but you do wonder whether simple would have been more effective.When it comes to housebuilding, the more measures, guarantees and capital funding initiatives there are, the harder it can be to track progress and see concrete results.
“The 100 per cent council tax premium on empty properties may not amount to much financially but it represents a tougher stance by the Government that should be applauded. The Chancellor’s call for an urgent review into land banking will also cause some in the development sector to sit up. The tide may be turning against them. If this Government is genuinely going to make a difference to the level of housebuilding, the gloves need to come off, and you sense they are. With both the Government and many developers more committed to build, the future is looking about as bright as it could be.”
Andy Sommerville, Director of Search Acumen:
“We have been calling on the government to consider all factors prohibiting homeownership in the UK, so the chancellor’s wide-ranging pledges are welcomed. Housing planning reform is a much-needed shot in the arm for the sector. Unlocking strategic development sites, clamping down on land banking and making best use of our urban land is crucial in making up the shortfall in new homes we have experienced over the last decade.
“The chancellor is correct in that there is no single magic bullet to solve our housing crisis. Our recent studies found that building 300,000 homes a year will go a long way to reducing the housing supply gap we are currently suffering. We only hope pledges turn into bricks and mortar without delay.”
Stuart Minchin, Director of Buildings at Matchtech:
“[The] announcement that the government is planning to build 300,000 new homes a year is a positive result for employment opportunities at all levels within the housing sector. Whilst this is good news for those working within this sector, it will present challenges for construction companies looking to hire in an already skills-short environment. Technical Managers and Technical Directors are in high demand and salaries are reflecting this.
“Construction has come out of a recession and if you look across the London skyline you can see cranes everywhere, reflecting that the buildings sector is still busy. The construction industry needs to put an emphasis on developing the UK’s home-grown talent to ensure it can deliver on these proposed plans in a post-Brexit world by focusing on apprenticeships and bringing more young people into the construction sector.”
Steve Radley, Director of Policy at CITB:
“The Government’s commitment to build 300,000 new homes each year and the £170m Sector Deal should give our industry the confidence and the firepower to make the investments needed to transform its performance. The right skills will be critical to deliver this change, so the £34m funding for construction training is a vital investment.
“The focus on digital skills is essential to developing a workforce which exploits the benefits of the digital revolution, aiding modern methods of production and boosting productivity. However, there is no quick fix to the skills shortage and construction skills must be of a high standard. We look forward to working closely with employers and Government to ensure these promising new measures deliver for our industry.”
Ben Kite, Managing Director of EPR:
“Perhaps contrary to popular belief, the Autumn Budget’s apparent neglect to consider providing means to revisit the extent of land included within the Green Belt is a blow for ecologists as much as for developers. The budget should have set aside funds to assist with the implementation of sensitive housing development projects on carefully selected sites within the Green Belt. Such projects, incorporating generous Green Infrastructure, would have provided not only social, but environmental benefits.
“Much of the current Green Belt is brownfield or intensively farmed agricultural land with little in the way of ecological value, and often little in the way of public access provision. Carefully planned and controlled development in limited areas of the Green Belt could have changed this, by delivering or helping to fund environmental enhancement projects. The Budget marks the failure to grasp another tantalising opportunity to improve biodiversity by using development to create new wildlife habitats, which would have benefitted the environment as well as encouraging communities to reconnect with nature.”
Bjorn Conway, CEO at ilke homes:
“ilke homes welcomes Philip Hammond’s commitment to invest £44bn in housing and to build 300,000 new homes a year by the mid-2020s. It is hugely important that councils and housing associations across the UK adopt innovative construction techniques in order to ensure these targets are met. While there is no ‘silver bullet’, the use of precision manufacturing processes will go a long way towards delivering affordable new homes quickly and at a low cost.
“Modular homes can be manufactured off-site and installed in a matter of hours. As such, modular construction techniques will maximise the number of homes that councils can deliver within restrained budgets. Modular homes specialists can install 10 homes on site a day, using precision manufacturing processes to create durable, high-quality affordable homes which are fully approved by the NHBC. We believe the Chancellor’s Budget is a positive step forward towards addressing the UK’s chronic housing shortage, and we look forward to working with the Government to ensure that providing homes for the people who need it most remains a priority.”
Doug Crawford, CEO of My Home Move:
“The Chancellor has pledged to make the dream of home ownership a reality for all generations, and scrapping SDLT for first-time buyers will undoubtedly be welcomed whole-heartedly by those struggling to get onto the property ladder. However, Britain needs to build, and while a new funding package for UK property development is a stride in the right direction, it will only help tackle our housing crisis if it is invested in the right places. The UK has been scraping the bottom of the barrel for affordable housing stock over recent years and it is vital that increased investment is used wisely to tackle such depleted supply.
“My Home Move’s research has found that 57 per cent of aspiring buyers remain confident about their chances of getting on the housing ladder. With many now due to see decreases in stamp duty it is now up to the UK’s housebuilders to ensure such healthy demand is met with healthy supply.”