Property Interview: Martin Smithurst, Keepmoat regional managing director

KEEPMOAT, the Doncaster-based housebuilder has recently passed the £1bn turnover milestone, and is in a prime position to help fill Government housing quotas, announced last year.

According to a report from July 2015, housing associations have the potential to build 120,000 homes a year, and the Government pledged 400,000 new homes by 2020.

Regional managing director for Keepmoat, Martin Smithurst said: “We can see a significant ramping up in building new homes, which is fantastic: the future looks bright from many perspectives.

“However, skills aren’t keeping up with that rate of progress and especially not for these new commitments. There are just not enough quality skilled people to develop homes the Government wants.”

Workers with specific trades such as bricklaying and joinery are in short supply.

“We’re going in to market to procure bricklaying subtrades but it’s very difficult to get quotes for work we want to procure. We’re finding it hard to find the right subcontractor for the price in our budget.”

With trades in demand, the prices of construction will go up, and this will restrict the growth the Government wants in the sector.

Mr Smithurst said that Keepmoat had the benefit of being a large developer. He said: “There’s a tendency to flip from one developer to the other. We have strong relationships but it’s not unusual for smaller subcontractors to fail to honour their contracts, and it becomes a vicious cycle in which he have to raise rates.”

“That’s an acute problem and creating challenges for our industry.”

The time between tendering for a scheme and completion, including planning delays and further negotiations, mean that the there can be a rapid increase in cost base for developers.

Mr Smithurst said: “As prices are pushed up, the product is less affordable. The overarching point is there is a skills shortage, and it’s difficult to get labour in the right.”

The shortage of mechanical and engineering construction graduates, as well as site management conveyancers means that they become subject to the same sort of dynamic as the tradesmen that are in demand.

There isn’t a quick and easy solution, said Mr Smithurst, who has been with the business for 25 years, starting as a trainee quantity surveyor.

He said: “We have a strong focus on bringing new people through, and are spending more than ever on developing our own people and bringing trainees into our business.”

9% of Keepmoat’s staff, totalling 3,000 in all, are apprentices, and the business has committed to grow that by 20%. The company pays above minimum wage for all its incoming apprentices.

“There needs to be a balance between trades and management. We have a strong focus on that,” said Mr Smithurst.

But the real investment the construction industry needs to be making is in schools, from as early an age as possible.

Mr Smithurst said: “The linkage that we’ve got with schools and colleges is good, but it needs to get better for ourselves and the whole of the industry. We should address it as an industry rather than waiting for the Government.

“You’d think that the construction industry, considering its buoyancy, would be very attractive to school leavers and university graduates, however it’s not seen as the ‘sexy’ new industry that advanced technology, for example, is. We’ve got a PR piece to do around that.

“The bigger issue is there’s a perception in schools that construction is just ground work, and it’s so much more than that. The message just isn’t getting across strongly enough. Construction offers a lot of other things than laying bricks – we should get involved and inspire young people to stay in towns like Doncaster and give them advice about what’s available in the growing industries.”