Unlocking the Challenges of House Building

The future of house building in the UK was the topic of a lively roundtable discussion, with industry leaders sharing their insights and experiences. Hosted by Michael Taylor, editor of TheBusinessDesk.com, the meeting brought together a diverse group of professionals, from civil engineers to residential developers, to explore the key challenges facing the sector.

The key discussion points included the gap between supply and demand, particularly for key workers and NHS staff, and the impact of regulatory burdens such as biodiversity net gain and the Building Safety Act. The need for better infrastructure, including schools and healthcare, was highlighted. The discussion also touched on the importance of Combined Authorities and joined up thinking in government who needed to adopt a balanced approach to meet housing targets while ensuring economic and environmental sustainability.

One of the central issues raised was the disconnect between supply and demand. As Anna Hwang of Place First explained, “We definitely see there is a gap in terms of buy demand, good quality, very professionally managed houses.” 

Hwang noted that her company’s target residents include a significant proportion of key workers and NHS staff who “don’t necessarily qualify for affordable housing but also struggle to meet some of the key economic criteria to buy housing.”

The challenges of unlocking development opportunities were a recurring theme. As Mark Alexander from Freeths put it, “Even when deals have been agreed and we’ve reached heads of term stage, issues that can be encountered all the way through, particularly on sites in and around Liverpool, where there are historical covenants, for example, preventing change of use, or building taking place, which then just become a complete block.”

The planning system and its complexities were a major point of discussion. 

Darren Muir from Pegasus Group shared a frustrating experience, recounting a scheme that was “in the Green Belt, but planning committee members could not understand that you could have brownfield land in the Green Belt. They said it’s either brownfield or its Green Belt, and that was based on objections from some of the ill informed neighbours and objectors.”

Dougal Paver from Merrion had similar tales, noting there’s a disconnect between the new government’s housing led agenda and local authorities. “At the national level, you’ve got government saying to local authorities, we want you to do more. Do it faster. But they’re pushing the political pain down to a local level. National Government isn’t going to face the electorate’s reaction to this for another four years and nine months. Local Government has it within its power to frustrate things, and we’re hearing dozens of examples of this, and that points to a disconnect between the private sector and local government.”

Helen Gribbon from civil and structural engineers Renaissance had similar observations. “Making friends on the local front is a big hurdle. We’ve had developments which have been completely put on hold and killed because of local people, who we then hear saying ‘oh yes, we won.’ But what have you actually won? This is a fly tip. It’s not even safe to walk your dog. And yet this is to be your natural green belt.”

Gary Goodman, development director of BXB Land said it may require a cultural shift as people wake up to the scale of the housing needs and the links to schemes being blocked by a system that doesn’t work.

“We’ve obviously had the last 15 years of governments who’ve done their utmost not to develop anything. It’s very interesting to hear the Labour Party call out NIMBYism for what it is. You’ve got a whole section of young people who just just have no prospect of owning their own home and that undermines their confidence to have jobs and the ability to create wealth, just because some people don’t want social housing next door to their house.” 

He added: “Planning committees should have more strength to say we can’t reject on those grounds. The way the planning system works, I’m ashamed sometimes.”

Guy Butler from Glenbrook outlined the careful economic balancing act. “I was with Homes England last Monday in Leeds, and they were saying that the government have identified eight working groups to unlock stalled sites. They have identified 2700 sites, of over 500 units, and they’ve got eight working groups to unlock it. And I was like, amazing, right? What happens when you unlock it and then they’re not viable? That’s the problem at the moment. It’s all very good and well. And the other problem is, you know, basic economics, you deliver 2700 sites of planning into the market, and your land value goes down all of a sudden, because there’s huge supply. So it’s a very complicated balancing act.”

Rachel Allwood from Dandara said that as a national developer, they see variations in the planning process wildly differently between authority areas at the minute. “I don’t know if anybody saw the Brownfield passport announcement yesterday in the consultation, and I thought it was interesting that it was a reference on density, and what we’re not building in our towns and cities is density. But specifically, I think it refers to Paris and Barcelona. And I thought, well, that’s very interesting, because there’s not many places in the UK that like Paris and Barcelona.”

But how many of these high density schemes in Paris that the government may be aspiring to actually meet all the requirements that were expected to meet?

“I think many questions do need to be asked, actually, if we’re not hitting those standards, is the quality of accommodation poor? I feel like we’ve set a benchmark without really understanding how. But let’s not forget the big issues here. There aren’t enough homes for people to live in, and that should be the primary agenda,” she said.

The regulatory burden on developers was another key concern. As William Baldwin from Sutcliffes Civil and Structural Engineers noted, “Everything just seems to be an extra cost. And there’s  no money to fund any of this.” 

Despite the challenges, the participants also discussed potential solutions and the importance of a more holistic approach. As James Ryan from Drees & Sommer pointed out, “there’s been a skills shortage in construction and has been ever present for the last three decades, plus, there’s been a lack of investment, and there has been a lack of investment in FE in Further Education to allow there to be skills in the future.”

Owen Carlyle, commercial director of Caro Developments, agreed: “We hear a figure of 1.5 million homes being thrown about when I read somewhere a couple of days ago, we’re going to need another 1.3 million construction workers that’s used to keep up with the number that retire, the number that have left due to Brexit, and then to deal with the increased targeted output.”

The need for greater collaboration between government, local authorities, and the private sector was a recurring theme, as Nick Jones from Riverside emphasised.

“We’re constantly having to literally put our own kind of planning resource into their legal resource to help them along the way.”

Helen Mitcheson of Freeths said she’s had a lot of discussions with the city council in Liverpool, and with environmental consultants and with developers around biodiversity net gain, another. 

“It’s mandatory to have this, but there’s not the capacity to implement, so it’s become another snag in the planning process, and could have a huge viability impact on projects.”

Overall, the roundtable discussion highlighted the complex and multifaceted challenges facing the house building industry. As the participants made clear, addressing these issues will require a concerted effort from all stakeholders, with a focus on innovation, collaboration, and a holistic approach to development.