A Bonanza for the Construction Industry?
There is a general recognition that Britain is simply not building enough new homes. Well, we have known that for many years. As long ago as 2002 John Stewart, Director of Economic Affairs at the Home Builders’ Federation, published a highly influential report – Building a Crisis; Housing Under-supply in England. Stewart argued that Britain faced a housing crisis because of an under-supply of new housing and examined the social and economic consequences of not building enough homes. Stewart had identified that in 2001, total new housing completions in Great Britain fell to 162,000, at the time this was the lowest for 54 years. Excluding the war years and their immediate aftermath (1940-47), completions were the lowest since 1924. Subsequently the Government acknowledged there was a crisis and set up the Barker Review of housing supply which reported in 2003 and 2004.
Numbers are bandied about but labour is promising to get back to 200,000 new homes a year by 2020. Emma Reynolds, shadow housing minister says:
“Under Labour’s plan, local government will take a major new role in assembling land, delivering infrastructure and commissioning housing development. But to succeed, it will be a partnership with the private sector, attracting private investment and commissioning private developers to build the homes we need.
“Labour will also increase competition in the building industry, build more affordable homes and unleash a new programme of New Towns and Garden Cities.”
The Conservatives are also committing to increased production. A flagship policy is the ‘starter’ home initiative which it says will alone deliver an additional 200,000 units on brownfield sites. There is also a commitment to maintaining the Help to Buy initiative through to 2020 on the basis that the industry is sales led and buyer demand will stimulate production.
So, if the politicians are to be believed, if the planning process can operate in a more efficient and timely manner, if the mortgage market is sufficiently competitive and fluid to support demand, if public initiatives can be turned into action quickly – then, the construction industry has a prolonged period of housebuilding activity ahead of it. Let us hope it has the skills, resources and supply chain it needs to deliver.