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House building must be a priority for the new government

Building the homes and infrastructure this country needs has to be a key priority for the new government to help drive the economy forward.

This is the view of Brian Berry, chief executive of the Federation of Master Builders, but is a sentiment echoed by many.

Berry commented: “The government needs to back the nation’s army of small builders, by delivering on the promised £3 billion National Skills Fund, investing in quality through a licensing scheme for the whole UK construction industry, and supporting local builders to retrofit the millions of homes that need to be upgraded to low carbon.”

Richard Beresford, chief executive of the National Federation of Builders, said: “The Brexit deadlock has negatively impacted the productivity of construction and housebuilding but our members will be breathing a sigh of relief that a direction of travel can now be set.

“With so many commitments to small business, housing and the climate, we look forward to supporting Prime Minister Johnson to deliver his manifesto and ambitions.”

Custom and self build

Andrew Baddeley-Chappell, CEO of the National Custom and Self Build Association (NaCSBA) welcomed the new government and its manifesto to ‘support community housing by helping people who want to build their own homes find plots of land and access the Help to Buy scheme’.

In particular, NaCSBA will be pressing for action on Help to Buy for custom and self build homes helped by the “oven ready” version of the scheme that it has helped to develop. NaCSBA has also identified actions needed to remove loopholes from the current Right to Build legislation and regulations.

This follows the recognition by the previous Conservative government that “the way in which the house-building market operates constrains the supply of new homes because there is insufficient competition and innovation”.

Green homes

The Builders Merchants Federation (BMF), the trade body representing the UK’s multi-billion pound building materials’ sector, is calling for swift action from the new government to transform the construction industry.

John Newcomb, chief executive of the BMF, wants Conservative leaders to set the conditions for a more productive, greener sector, which in turn will protect and create jobs across the UK.

He said: “Now the real work begins and we need to see a policy and real action to build homes, eliminate carbon in our housing stock and create prosperity.

“We keenly await news of the appointment of both the next housing minister and climate change minister as they have responsibilities affecting the building materials’ supply chain.”

The BMF said ministers must focus on two major issues, namely the narrowing of the gap between housing demand and supply, and the decarbonisation of heating and electrification of homes with sustainable means.

Newcomb added: “On new housing, BMF members want to see unrelenting political determination behind concerted action to simplify and speed up planning approvals for uncontroversial applications to increase housing completions.

“The whole thrust must be implementation, so BMF members can invest confidently in the people and materials and products needed.

“Early clarification on what the future holds for the ‘Help To Buy’ Scheme would be very welcome as a start.

“With regard to decarbonising homes, BMF members have a key role to play as they make and deliver the majority of materials and products used to provide low carbon solutions for today’s housing.

“The BMF urgently wants a coherent, long-term framework that combines better insulation, efficient boilers and low-carbon, micro-generation on the road to net zero carbon emissions.

“Reducing VAT from 20% to 5% on home improvement works is central to this and the BMF, along with others in construction, have already written to Mr Johnson to outline the economic, environmental and social benefits from improving existing properties with a lower VAT rate.”

The BMF has put the value of the builders’ merchant and building material supply sector at £56 billion – which directly provides more than 330,000 jobs, across 23,000 companies in the UK.

Newcomb concluded: “An incredible 80 per cent of all building products used in the construction of homes and buildings are manufactured in the UK.”

New build sector

Founder and CEO of Stone Real Estate, Michael Stone, believes the outlook for the new build sector is good: “We’ve seen many big housebuilders operate on a more hands-off basis of late, largely due to a lower rate of house price growth and a fear of financial underperformance in tough market conditions.

“However, the new build sector has actually been the silver bullet against Brexit uncertainty with those opting to enter the fray rewarded with consistent levels of buyer demand and buoyant sold prices to match.

“With things only about to get better, the new build sector can expect a busy time over the coming year as pent up market apprehension surrounding our political landscape is relieved to a degree, and more homes are built, more homes are bought, and market sentiment receives a well-needed boost.”

By Joanne Atkin

Source: Mortgage Finance Gazette

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Britain heads for worst house building decade since 1940s

Britain is heading for the worst house building decade since World War Two.

Despite Government efforts to boost house building, completions in England between 2010 and 2019 are set to average out at around 130,000 per year.

This is well short of the 147,000 achieved in the 2000s or the 150,000 of the 1990s, and half of the level in the 1960s and 1970s.

The picture becomes even worse when population size is factored in.

In the 1960s, the new-build construction rate in England was roughly the equivalent of one home for every 14 people over the decade. In the 2010s, that ratio was one to 43, more than three times higher.

The figures are improved somewhat when you factor in conversions of existing properties, which push the total up – but even then, the total of net additional dwellings – the yardstick for overall housing supply – is likely to be lower this decade than last.

Across the United Kingdom as a whole, the pattern is broadly similar, with house building falling from a peak of 3.6m new units in the 1960s to 1.9m in the 1990s and 2000s, with the 2010s set to come in lower still.

Robert Colvile, Director of the Centre for Policy Studies, said: “The housing crisis is blighting the lives of a generation, and robbing them of the dream of home ownership.

“But as this analysis shows, this is not just the consequence of the financial crisis – it is part of a pattern stretching back half a century, in which we have steadily built fewer and fewer new homes.

“The Government has rightly promised to focus on this issue, and there are encouraging signs that housebuilding is picking up.

“But ministers need to take bold action in 2019 to ensure that the 2020s become the decade in which we break this hugely damaging cycle.”

Source: Construction Enquirer

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Housing crisis: England needs four million extra homes

England faces a shortfall of almost four million homes, as the housing crisis continues to rage across the country, according to research.

To meet the backlog and provide for future demand, the country needs to build 340,000 homes a year until 2031, the research carried out by Heriot-Watt University found.

And 145,000 of these new homes should be affordable, with 90,000 for social rent, 30,000 for intermediate affordable rent and 25,000 should be for shared ownership.

The government’s current target is to build 300,000 homes for first-time buyers a year.

Those in desperate need of accommodation include homeless people, private tenants spending huge amounts on rent, children unable to leave the family home, and couples delaying having children because they are stuck in unsuitable housing, the National Housing Federation (NHF) and charity Crisis said.

Government action

They have now called on the government to take action to tackle the problem, which is expected to publish a social housing green paper this summer.

David Orr, chief executive of the National Housing Federation, said: “The shortfall of homes can’t be met overnight – instead, we need an urgent effort from the government to meet this need, before it publishes its social housing green paper in the summer.

“The green paper will set out the government’s approach to tackling a number of key issues, like stigma of social housing tenants.

“However, it is clear that many of these stem from a chronic underinvestment in affordable housing.”

Terrie Alafat, chief executive of the Chartered Institute of Housing, added: “This report once again highlights the chronic housing shortage we face in the UK and it is clear that only a bold and ambitious plan to solve the housing crisis will prevent a decent, genuinely affordable home being out of reach for our children and their children.

“What the report also shows is that this isn’t just a numbers game and we have to make sure we build the right homes, in the right places and that people can afford them. For most people social rented housing is the only truly affordable option and the government must support the building of many more of these crucial homes.”

Source: Your Money

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Shropshire Council plans to build and sell houses in bid to plug financial hole

Shropshire Council is planning to build and sell houses to make money as part of its efforts to tackle a financial black hole.

The council is suggesting the measure as one way of dealing with its financial deficit and says that the purchase of Shrewsbury’s shopping centres will also provide an income of £2.7 million in the next financial year.

Other projects the authority hope will raise money include the redevelopment of Shirehall as a ‘public sector hub’, the development of health centres and community hubs, and buying and developing commercial property.

The council also wants to sell its services to external clients, and look at new services it could provide.

These include a new library services initiative called “Fab Reads”, charging for the time of building control team staff, and fees for tree preservation orders.

The proposals will be discussed at Thursday’s Audit Committee meeting.

The move to build and sell houses has been welcomed by the council’s Labour leader Alan Mosley, who described the plan as a “far better” investment than the shopping centres.

He said: “It’s good to see that they’re looking at investing in housing, particularly the rental section, which would be a far better investment than the shopping centres in terms of social value.”

But he criticised proposals to sell some of the council’s services as a risk.

“Shropshire Council is desperate to try and fill the massive black hole in its finances and seeking additional income for services is one way,” Councillor Mosley added.

“However, as has been acknowledged in the financial strategy, there are massive risks in relying on income to fund future service needs.

“This is no way in which councils should be financing the provision of vital and critical resources for residents.”

The council’s commercial strategy, approved by cabinet in March 2017, intends to invest in schemes and projects which can deliver £10m to £15m of new revenue income over a period of five to 10 years with returns of investment exceeding 10 per cent.

A spokeswoman for Shropshire Council said: “As government funding dwindles, choosing where to make savings is getting more and more difficult, especially as demand on the services we provide for our most vulnerable residents increases.

“Our financial strategy sets out a number of savings we propose to make over the next five years in order to balance our (revenue) budget.

“A key part of this is raising income.

“We are continuing to review all of the services we deliver (over 150, across the county) to explore whether they can sell their existing services to external clients and identify any new ones they can provide.”

Source: Shropshire Star

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House building helps UK construction output rise at fastest pace in five months

Demand for house building helped offset a drop in civil engineering and commercial construction activity.

The UK’s construction industry experienced a “moderate rebound” in November, as a pick-up in house building helped output grow at its fastest pace in five months.

The Markit/CIPS UK Construction purchasing managers’ index (PMI) showed a reading of 53.1 last month, up from 50.8 in October and easily beating economist forecasts for 51.0.

A reading above 50 indicates growth.

It was the highest reading in five months, with house building projects again emerging as the “primary growth engine” for industry activity.

The survey said participants chalked the growth up to “resilient demand” and a “supportive policy backdrop” for residential development.

It helped offset a drop in civil engineering activity and commercial construction, which was the weakest performing sub-sector in November as Brexit-related uncertainty and a subdued economic outlook weighed on client investment.

Duncan Brock, director of customer relationships at the Chartered Institute of Procurement & Supply (CIPS), said: “It appears that policy support and a small recovery in the UK economy has boosted sentiment and encouraged clients to come out of their shells and start building again.

“The housing sector was the primary driver of growth increasing at the fastest rate for almost half a year.

“However, it is private sector companies that need to commit to big-ticket spending, with commercial development still underperforming as persistent Brexit uncertainty continues to bite.”

He added that there was also concern that a drop in new contracts has dragged civil engineering works, with activity dropping for the third straight month and marking the longest period of decline for more than four years.

But some construction managers have expressed hopes that “forthcoming tender opportunities” linked to energy and transport infrastructure programmes will increase workloads.

Overall, companies pointed to a “moderate rebound in new orders” last month, thanks to a “general improvement” in client demand which had softened over the summer. In turn, it sparked a “moderate rise” in sector jobs growth.

Optimism among business picked up from October’s 58-month low, though the survey noted that confidence was still relatively subdued and was hovering near its lowest levels since mid-2013.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said relatively low mortgage rates, the Government’s Help to Buy Scheme and other policy initiatives are likely to keep home building activity bouyant.

“Meanwhile, signs that the Brexit divorce terms will be agreed imminently, enabling future relationship talks to begin, might help corporate confidence to recover.

“But with the UK Government insisting — for now — that Britain eventually will leave the EU’s single market and customs union, firms likely will remain reluctant to commit to construction projects with long-time horizons.

“We expect the construction sector to bump along the bottom as long as a hard Brexit still is one of the options on the table.”

Source: Express & Star