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12/09/2018

Skills shortage set to hamper housing delivery, say small builders

Words: Laura Edgar
New houses | iStock-175157265

Research by the Federation of Master Builders (FMB) suggests that small builders believe a shortage of skills in the building industry will be a bigger concern over the next three years than access to finance.

Results from the FMB’s House Builders’ Survey 2018 states that the percentage of SME housebuilders that think a shortage of skilled workers in a major barrier to their ability to build more new homes increased from 42 per cent in 2017 to 44 per cent.

Brian Berry, chief executive at the FMB, said: “Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes. The construction sector is heavily reliant on EU workers, with just under one in 10 workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face. Given that the UK will leave the EU in less than six months, housebuilders are understandably concerned that skills shortages could worsen and choke housing delivery.”

To combat the skills crisis, the construction industry needs to encourage more people to take up a profession in the industry, such as bricklaying or carpentry, and develop high-quality qualifications, according to the FMB.

Berry said that it is “critical” that the government “doesn’t pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system”.

A lack of available and viable land, though, tops the list of most cited barriers, as in 2017. Of the 116 SME house builders that took part in the survey, 59 per cent cite this as a barrier, with 62 per cent saying that the number of opportunities for small site development is decreasing, rising from 54 per cent.

The research also found:

  • 46 per cent of small housebuilders think access to finance is a major barrier to their ability to build more new homes.
  • 51 per cent of SME housebuilders view the planning system as a major constraint on their ability to grow.
  • “Inadequate resourcing” of planning departments was specified as the most significant cause of delay in the planning application process for the third year in a row.

Berry acknowledged that access to finance concerns have eased of late owing to the government funding schemes, such as the Home Builders Fund, but insisted that more could be done.

Berry explained: “This latest research suggests that if firms were able to borrow 80 per cent, rather than the current 60 to 65 per cent of project cost, SME builders would be able to bring forward on average 40 per cent more new homes. Given the ambitious housebuilding targets the government is working towards, we cannot afford to ignore such a chance to significantly increase housing delivery.”

Victoria Hills MRTPI, chief executive at the RTPI, said: “In the year to 31 March 2018, planners granted 347,000 planning permissions for homes in England – an 11 per cent increase from the same period last year. Planners are playing their part in ensuring not just a supply of homes, but to help ensure they are in the right places.”

The research comes as Barclays and the government team up to provide £1 billion of development finance to help increase the pace and volume of housing provision across England. Launched today (12 September), the Housing Delivery Fund aims to put a greater emphasis on diversifying the housing market, with a key priority to support small and medium-sized businesses.

House Builders’ Survey 2018 can be found on the FMB website (pdf).

Image credit | iStock

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