Housebuilding activity plunges leading to failing targets

The construction industry has faced ongoing challenges from rising mortgage costs hitting buyer demand, to schemes closing that make housing affordable for first-time buyers such as the Help to Buy scheme. Now, companies have cut back on targets this year since the unveiling of the mini-Budget in Autumn 2022. It has been estimated that housebuilding businesses, such as Barratt and Persimmon, could sell 18,485 fewer homes, equivalent to a 27% decline. Developers have long expressed their concerns about how the ongoing decline in activity is contributing to the housing crisis, now, Clive Holland, broadcaster on Fix Radio – the UK’s only national radio station for builders – explains what the UK must do to meet homebuilding targets, with a point of view from the trades.

Government data revealed that just 898 major residential projects were approved between April and June this year, down 11% on the same period in the previous year, marking the first time the quarterly figure has dropped below 1,000 since 2012. However, Keir Starmer pledged to create a new generation of new towns across Britain, including 1.5 million homes, should the Labour Party come to power at the next general election. Now, the reality of this goal is being discussed across the construction industry, with tradespeople declaring the lack of resources to do so.

The growing decline of recourse is being noticed nationwide by councillors. A report by the National Planning Barometer concluded that there was a “crisis of resource that sees local authority planning departments unable to deliver the service on which the system relies”. Six in ten of those surveyed said their planning teams lacked the resources to do the most efficient job. Yet, the report illustrates how planning teams had become disappointed by council planning committees voting against their recommendations, claiming a “fundamental difference of opinion” between planners and councillors.

Now, councillors believe that slow progress by developers was a reason for not enough houses being built, yet it’s been noticed that most builders could ill-afford to move slowly with their sites and delays could often be attributed to poorly resourced planning departments. Whether it be battling against record material and labour prices, an historically small workforce, regulations that stifle the ability for builders to work, as well as being in the grips of a mental health crisis, the construction industry is facing significant obstacles.

Clive Holland, presenter at Fix Radio – the UK’s only national radio station dedicated to tradespeople – provides his insight on the current state of the construction industry:

“The government target of 300,000 houses to be built per year, even before COVID was extremely unrealistic for a couple of reasons. After Brexit, a lot of our support teams went back to their own countries, we didn’t have enough people in our industry, we’re already short of trades people as it is. Everybody except for emergency services, and the building industry, believe it or not, and trade associated trades, virtually stopped working during COVID, you know, 80% of the population were furloughed, and so on. So it was always going to be a tricky one, to try and get anywhere near that demand of 300,000 houses built.

“Now you’re in a situation where a lot of house builders have mothballed a lot of their sites because they can’t sell them due to rising interest rates. Lots of sites generally around the country would have been flooded with people buying off plan without even looking at the house.”