The provision of new homes and housing need in the UK are hot topics – with recent estimates showing a requirement to build 240,000-245,000 new units on average per year.
Considering the current build rate is around 100,000 per year it was good timing for the London networking event ‘Movers and Shakers’ to host a debate on “Residential London – Setting the Future Agenda”.
The early morning event at the swanky Dorchester Hotel hosted a panel of some of the biggest names in the residential game including Steve Morgan OBE (Chairman Redrow plc), Stephen Stone (Chief Exec Crest Nicholson plc) and Rob Perrins (Group MD The Berkley Group).
The Q&A Session with the panel started tamely with all panelists acknowledging the shortage of homes within the UK and the need for increased output from the industry. As the effects of the unlimited coffee kicked in, the discussion livened up with the panelists giving more frank an honest views on the state of house building in the UK and in particular the reasons why the extra number of homes are not being delivered.
The Local Authorities and their planning Departments got the brunt of the criticism from the panel with Steve Morgan OBE giving a candid personal view of his own Local Authority at the end of the discussion. Frustrations in terms of length of planning considerations and the associated ‘‘red tape’’ was high on the agenda with Stephen Stone stating that Crest Nicholson spend more on planning permissions annually than actual “bricks and mortar”, which when considering the amount of detailed reports required for every aspect of a Development Site is not that surprising! It’s fair to assume that newts and arbrioculturalist reports were probably not top of the planning agenda when these guys first started building houses back in the 1970’s!
Steve Morgan OBE told how his first development in 1974 was a small Greenfield site, where he obtained planning permission and built the scheme out all within 2 years. Could that be possible in 2015? – not a chance! This simple point reinforcing the view that the appeal of new entries into the market by house builders is severely dampened by the current delivery and return timescales.
I strongly believe the UK is not going to deliver these new homes if there is no new fresh blood or competition in the market. The current players in the market are making money at the current output rate so what’s their incentive to push to the next level?
The panel later admitted that that the industry does not have the people or skills to deliver increased output and is something they shoulder the blame for. This was seen within the last year when a shortage of concrete blocks exposed the skill shortage in alternative construction methods within the industry. Most of the panels boasted about their internal training programmes and up-skilling plans but this only seemed a drop in the ocean compared to what is really needed. The years of neglect during the recession times are coming back to haunt.
So after a two hour discussion what is the solution to the ‘housing crisis’..? A relaxed faster planning process, less red tape, more resources within the industry, innovative construction methods/skilled workers and new enthusiastic house builders in the market. Simples.
Head of Land Development
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