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Autumn statement 2015: The industry reacts

The industry has reacted to the chancellor’s autumn statement which included plans to double the house-building budget

Ben Derbyshire, chair of The Housing Forum 
The forum champions more homes and better homes so we welcome the priority given to spending on house-building in the autumn statement. We also welcome the commitment to build a million homes over the life of the parliament and we believe that improving housing supply is really the only effective way of tackling the affordability crisis. While housing supply and planning approval numbers have both increased, it’s a long road back to a balanced market, which will need all sectors of the industry to play their part. So we have some concerns about demand-side policies which rob social housing Peter to pay home-owning Paul, as a balanced housing market for all needs affordable homes to rent. The boost to private house-building on the supply side should now be accompanied with measures to ensure quality, and embrace modern techniques and manufacture.

Demand side policies rob social housing Peter to pay home-owning Paul

Government should be pulling all the levers available, supporting all forms of housing provision if it is to have any chance of success. The housing association movement has a crucial contribution to this endeavour and we hope that more can be done to put in place structures that will bolster their delivery of social, affordable, build-to-rent and shared ownership homes especially. For those who will not have the opportunity of a new home, we should prioritise keeping older homes warm and in good repair

Meanwhile, while we applaud work in the recent past to rationalise and simplify standards and regulation for housing, much in line with advice offered by The Housing Forum to the Red Tape Challenge, we feel now is the time to do more to bolster quality. Government should move to support and encourage quality initiatives stemming from industry, such as Building for Life 12, as well as our own Home Performance Label. Such initiatives, implemented widely, would not only reassure consumers that quality is being maintained while production is increasing, but improving the reputation of the product will ease the approvals process.

Roger Hawkins, Hawkins\Brown
George Osborne has missed an opportunity to incentivise small builders and developers who could focus on the upgrade and refurbishment of existing buildings and challenging urban sites.

In London, where over 50 per cent of new homes are delivered by only six major home-builders, there is a clear opportunity to increase diversity in the marketplace by giving tax breaks on difficult sites and removing VAT from refurbishment.

Steve Sanham, development director, HUB Residential
With the government promising to subsidise home ownership for the masses, the chancellor has effectively admitted that it can’t get the housing market under control. It appears that the housing policies of the past few decades have been an utter failure.

Headline grabbing affordable housing initiatives smack of short-termism

The problem hasn’t been a lack of ‘affordable housing’, rather a lack of affordability in general. Investment in infrastructure to bring new areas on line for development, and freeing up the bureaucracy of the planning system, are the only ways to bring ‘market homes’ within the reach of first-time buyers. New headline-grabbing affordable housing initiatives smack of more short-termism, and an inability or unwillingness of the government to grasp the big issues.

Julie Hirigoyen, chief executive at the UK Green Building Council
The chancellor was keen to emphasise the government’s green credentials ahead of Paris, but they are going backwards on one of the most cost-effective opportunities – improving the energy efficiency of our existing housing stock. The cuts to ECO and RHI will see more jobs lost in the industry and vulnerable households will continue to be trapped by unaffordable energy bills.

Upgrading the UK’s draughty homes is a key infrastructure challenge which can reduce pressures on our energy system, bring down consumer bills and ease the burden of cold homes on NHS budgets. The chancellor repeatedly talks about productivity, but here he is just discouraging investment and destroying a market.

Stewart Smyth, housing expert, University of Sheffield’s management school
The chancellor appears to believe that throwing money at private-sector housebuilders will address the housing crisis. It will do nothing to help the 1.7 million on council waiting lists. Instead, the government is subsidising the profits of private construction firms. The markets recognise this, as shown with the share price rises of those housebuilders on the FTSE 100.

The private sector cannot deliver the level of housing that is needed, never mind projected by the chancellor. So this public funding will not be used to expand the house-building capacity in the country but will instead boost the profits of private housebuilding companies.

These are homes for the richest few

Tom Copley, Labour’s London Assembly housing spokesperson
Efforts to promote home ownership must be additional to, not instead of, support for genuinely affordable homes for rent. The chancellor has totally ignored the challenges we face in London, where his starter homes will cost up to £450,000. Housing at that price cannot be said to be affordable by any reasonable person. These are homes for the richest few with a discount paid for by the taxes of Londoners who could never dream of being able to afford one. It’s a brilliant deal for the already wealthy but will do nothing to help Londoners on low and middle incomes access secure, affordable housing whether rented or owned.

Mark Naysmith, UK COO and MD for transportation, infrastructure and property, WSP | Parsons Brinckerhoff
Huge projects and 400,000 homes is great news for the UK’s sustained economic growth, but they do not build themselves. We can only get Britain building by urgently attracting and training a skilled workforce to deliver much-needed new infrastructure. On this matter the government is supporting our recruitment efforts through its firm commitment to apprenticeships and large transport projects including HS2, rail electrification, road building and the regional development opportunities they bring. Political certainty and stability remain our industry’s lifeblood. Where this is lacking – as remains the case with energy efficiency and airport capacity – investors cannot plan for the future with the same confidence. However, overall today’s statement is definitely a step in the right direction for the industry.

Adrian Leavey, real estate partner at law firm Trowers & Hamlins
The 3 per cent additional stamp duty on buy-to-let properties announced in today’s autumn statement may well limit the number of new private landlords, and could also restrict those already in the market from further expanding their portfolios. Is the additional stamp duty set to be just a short-term tax yield that will simply be priced into increased rents?  If it is, we could end up seeing a further squeeze on affordability in an already undersupplied market.

Janet Askew, president of the Royal Town Planning Institute
Putting housing at the heart of the country’s economic planning is good news, but the focus on overall numbers, when we need balanced communities in our cities and towns, is worrying. We need a range of different housing types which are affordable to rent and to buy. We also need to be realistic regarding the ability of local authorities’ planning teams to deliver these housing initiatives under the current funding arrangements.

But the drive to build presents a good opportunity for city, county and district leaders to ensure that planning is at the heart of all they do and is integrated with transport, health, environment and business to ensure not just housing, but economic growth and social wellbeing are delivered holistically for people.

John Hicks, director and UK head of government and public, AECOM
Departmental cuts combined with the scaling back of civil servants necessitates new ways for government to engage both internally and with the private sector. A fundamental shift from hands-on delivery to hands-off governance is needed.

The chancellor’s rhetoric around ‘we are the builders’ didn’t appear to be accompanied by significant new money across the board. With transport at the sharp end of departmental revenue cuts, the challenge now is for government to play its part in delivery as the number of public servants further erodes. Are the right people with the right skills, governance and procurement tools in the right place within the public sector to allow the builders to move in? This could be an opportunity for new ways to engage and deliver.

Supply has only increased through a balanced, multi-tenure approach

Given the urgent need to house the UK’s current and future workforce, we welcome the initiative to build 400,000 affordable homes and the chancellor’s response to the difficulties faced by the shared ownership sector following the changes to ‘right to buy’. Government investment in Ebbsfleet Garden City and other schemes will further fuel housing growth. However, accelerated home ownership must not come at the expense of the affordable rental sector. History shows that supply has only increased through a balanced, multi-tenure approach.

We would therefore like to see greater focus on extending the breadth of development players and encouragement for new entrants. Importantly, homes must be built where there is demand. Building housing in line with infrastructure investment and development is the key to creating communities where people want to live and work. Greater emphasis on sustainable, long-term planning of infrastructure to underpin economic growth is now needed.

Matt Pullen, managing director of AkzoNobel UK
The chancellor is right to focus on the urgent need for more affordable homes. We welcome today’s measures which will offer real help to stimulate UK house-building. To deliver on the government’s ambitions for 400,000 affordable new homes, government and industry need to come together to tackle the skills shortage in construction.

Simon Hay, chief executive of the Brick Development Association
We are pleased by the provision of £7 billion for new homes. The focus now must be on turning housing promises into on-the-ground project delivery.

We look forward to making our contribution to addressing the chronic housing shortage that has built up over recent decades. The reopenings and development of new brick plants are already incredibly positive signs in the revitalisation of the house-building sector.

We should take positively from the news that new-build housing has risen by such an extent, and should continue to rise over the next year as more focus is directed towards the current housing situation.

Brian Berry, chief executive, Federation of Master Builders
Faced with some difficult decisions regarding public spending cuts, today the chancellor was right to ‘choose housing’ by prioritising investment in new affordable homes. The government has confirmed plans to build 200,000 starter homes with 20 per cent discounts for under-40s, 135,000 shared ownership homes, 10,000 rent-to-buy homes and 8,000 specialist properties for the elderly and disabled. This amounts to a £7 billion public investment in new homes – a concerted effort to give aspirational home-owners a helping hand onto the housing ladder.

The cost of hiring skilled tradespeople is threatening to make sites unviable

Nevertheless, ‘George the Builder’ will need a new generation of ‘real’ builders to make his vision for housing a reality. We’re already seeing housing developments starting to stall because the cost of hiring skilled tradespeople is threatening to make some sites simply unviable. Unless we see a massive uplift in apprenticeship training in our industry, there won’t be enough pairs of hands to deliver more housing on this scale. That’s why we’re keen for the government to tread carefully when applying the new proposed apprenticeship levy to the construction industry.

The chancellor clearly recognises that the crisis of home ownership is inextricably linked to a crisis in house-building. We therefore hope that in order to address both, the government will do everything it can to increase house-building capacity. SME developers will have an important role to play in delivering the smaller-scale sites across the country. The last time we built in excess of 200,000 homes in one year was in the late 1980s when two-thirds of all homes were built by small developers. SME housebuilders now only build little over one quarter of all new homes, which points to another serious capacity issue – we need more small housebuilders to enter the market and also for SME housebuilders to crank up their delivery of new homes in order to build the chancellor’s 400,000 new affordable homes.

Greg Hill, strategy and change management director, Hill
Extra funding for starter homes is great news for prospective home-buyers, and will undoubtedly help to get more first-time buyers and young families on to the housing ladder. Shared ownership properties too are a great way for young people to buy a home without a large deposit. It is certainly the case that the size of deposit required to buy a home acts as a major barrier to first-time buyers entering the housing market, and these initiatives will go some way to addressing the problem.

However, it still remains that a crucial issue over the coming years will be whether the UK housing industry is structurally able to supply the volume of homes needed to meet government targets. Planning reform, as well as greater investment in skills and training for careers in construction, are essential if the industry is to deliver the extra homes in the time frames that Britain needs. We have a rapidly ageing workforce, with many tradesmen and skilled professionals due to retire in the next few years. The industry may struggle to deliver these 400,000 new homes if the gap in capacity is not filled.

If the industry is to build more homes, we also need to ensure that council planning departments have enough resources to make quick decisions on planning applications. The budget cuts that have also been announced today as part of the spending review could have an impact on local authorities’ ability to make decisions quickly.

Daniel Gandesha, CEO and founder, Property Partner
Britain does face a housing crisis but home ownership is not the only concern. There is a chronic shortage of rental stock that must also urgently be addressed. Raising the stamp duty for buy-to-let landlords is not the answer – it’s a blunt tool and fails to take into account the millions of Britons who need affordable homes to rent. The chancellor should work with industry to deliver innovation to the sector, to back small builders and to support a responsible and sustainable buy-to-let market.’

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