Skills shortage and planning system ‘preventing solution to housing crisis’

A report from Lloyds Bank into the state of the UK housebuilding industry found real concern over the effect of the sector’s skills shortage among SME contractors and major national developers – not only on individual firms, but also on national housebuilding rates and the UK economy as a whole.

According to the Building for Growth report, there are a number of key issues preventing the effective tackling of the housing shortage, including slow planning decisions (46 per cent), public opposition to development (42 per cent) and lack of skilled workers (25 per cent).

Indeed, a quarter (24 per cent) said the skills shortage is the biggest broader challenge currently facing their business. More than a third (35 per cent) believe there is a lack of suitable candidates to fill existing and new jobs.

Housebuilders said the skills shortage is most acute among electricians and site managers (both 34 per cent), with project managers (33 per cent), quantity surveyors (31 per cent) and architects (31 per cent) following closely behind – reflecting the supply chain-wide nature of the problem.

Housebuilders appear to be taking steps to redress the balance, with 31 per cent prioritising investment in recruiting apprentices in an effort to increase the pipeline of talent coming into the industry.

When asked what one change housebuilders would advocate for the alleviation of the housing shortage, 23 per cent said greater local authority support to promote and fund building projects, while the same figure sought additional government support.

Existing government schemes; Stamp Duty reform and the Help to Buy equity scheme; were flagged by 73 per cent and 63 per cent respectively as having a positive impact on the housing crisis.

Despite the challenges cited in the report, housebuilders seem to be optimistic about the future, with respondents giving an average score of seven out of ten when asked to rate their confidence in the success of the UK housebuilding industry in the future.

A total of 87 per cent of respondents want to create new jobs in the next 12 months, and if replicated across the industry, this could mean the creation of more than 100,000 new housebuilding roles.

Alasdair Gardner, regional managing director, Bank of Scotland Commercial, said: “This report sheds light on the key areas of support that firms in the sector need to ensure the long-term success and sustainability of the industry. Clearly, housebuilders are very concerned about the barriers preventing them from playing a role in alleviating the housing shortage.”

Stewart Baseley, executive chairman, Home Builders Federation, added: “The outlook for housebuilders is more positive than it has been for some time, and the findings of this report reflect that. Output has increased significantly in response to the higher effective demand generated by a general improvement in the economy, and the Help to Buy equity loan scheme.

“A shortage of skilled people has become the biggest concern and the industry is investing massively in training.

“If a positive policy environment and a stable economy can be maintained, the industry will continue to grow to deliver the Government’s ambition to build more homes and tackle our entrenched housing crisis.”

The Lloyds Banking Group Commission on Housing is calling for a progressively rising target for national housebuilding that will deliver two million to 2.5 million homes by 2025.