Construction is in a crisis.
Some of my colleagues in the sector have described this as the most difficult environment for developers in a generation. And I have to say, I agree.
To any impartial analyst, this would seem to be an odd state of affairs: house building is an established cornerstone of the UK economy. Few other sectors provide more injection into government coffers than the property market – not only from the income it derives from developers, estate agents and surveyors, but also the support it provides for associated industries (such as kitchen-fitters, electricians, plumbers, painters, decorators, tilers, roofers, carpet-layers, interior designers etc).
However, the problems we are encountering now will pale into insignificance with the chaos in housing that will result in 10 or 15 years’ time, if we do not get a grip on the situation straight away.
So, to outline what needs to be done, I’ve identified the five biggest barriers to building that are currently standing in our way:
1: Government inconsistency
First, there were local housing targets (which added up to 300,000 a year nationally); then they appeared to have been scrapped.
Not so long ago, councils had to submit housing plans; then that was deemed unnecessary.
Plus there’s been the revolving door of housing ministers – an unbelievable 14 of them over the last decade; six since 2020. (The current incumbent in the role is MP Rachel Maclean).
Even with a single political party in power for the past 12 years, the guidance and advice at national level has chopped and changed, ebbed and flowed, leaving councils in a state of limbo about what they should do next.
Late last year, Secretary of State for Levelling Up, Housing and Communities Michael Gove watered down existing building targets, saying they will now be a “starting point” and “advisory”, rather than mandatory.
But if this is the case, the likely result is that councils won’t bother. In effect, local authorities have been provided with the green light to give up on local plans and take a ‘wait-and-see’ attitude instead.
The truth is – if you haven’t got targets at a local level, it’s inevitable that you’re not going to hit targets at a national level. And that is exactly what’s now happening.
2: Council negativity and inaction
If the government are serious about the 300,000-a-year target, the attitude to development should be ‘in principle, yes – unless there’s a very good reason why not’. But for years it’s been ‘in principle, no’.
What’s more, applications are so complicated and expensive that many small and medium-sized developers can’t afford them. A simple application with all the required reports is so expensive (in the region of £50,000) and often takes 6-12 months to go through the system – timescales which can break a business.
As we’ve said before, each local authority’s back yard would be a good place to start. Recent research has identified almost 320,000 unused small plots of land owned by local councils that could accommodate 1.6m new homes if developed. These plots are all listed with the land registry as having no use and no existing buildings, and equate to nearly 100,000 acres of land going “unnoticed and unutilised” under the noses of local authorities – many of which would be perfect for the smaller developer.
3: Planning authority delays
It seems unbelievable now that planning decisions used to take place in around 12 weeks. I can’t remember the last time that happened. The usual duration is now closer to a year. Even the time for appeal has gone from an already lengthy 6 months to 9 months or even longer.
The simple fact is that planning authorities are massively understaffed and underfunded. There are too few people with too little money in their budgets to make the speedy decisions that are needed. Morale is low, apathy is high, and in-trays are over-flowing.
This sort of thing may be a frustrating hindrance to the big developer. But for small and medium-sized businesses, the delays can drive them under.
As an example of what I mean, the second series of the TV hit ‘Clarkson’s Farm’ landed on Amazon Prime Video this month. It shows Jeremy Clarkson’s attempt to expand his farming business, only to be met by bureaucracy, resistance and refusal at every turn. The national press has responded to the programme by calling it “the most convincing argument you’ll see for overhauling our 70-year-old planning system”.
4: A misconception about ‘Brownfield development’
Without doubt, ‘brownfield land’ is the single most frequently repeated answer to the question ‘where should new houses be built?’.
But the ease at which this response is given betrays the level of misunderstanding out there about how building on brownfield sites actually works.
A lot of the smaller brownfield sites rely on SME developers stepping in, because the plot size is too tiny to interest the bigger construction companies.
However, the smaller developers’ hands are tied by the relentless and turgid procedures and processes which take so long, and which adopt a ‘computer says no’ stance from the very start (see above).
As for the larger sites, many of them have contamination issues that are so costly to put right, they have become unviable anyway. If brownfield sites really were that attractive, developers would be snapping them up. As it stands, most of the lower-hanging fruit has already been picked.
5: Public resistance
When questioned, most people seem to accept that this country desperately needs to build more homes. The problem is – many of those individuals don’t think that the construction should happen near them. This trait of NIMBYISM (Not In My Back Yard) has always been with us, but if anything, it’s got worse in recent times.
Strangely, much of the resistance seems to come from people aged in their 50s who have children who are leaving university, starting in their first jobs, and hoping to set up home in the next few years.
These parents need to understand that the laws of supply and demand mean fewer homes equals higher property prices. So, if those same people want to perpetuate the conditions which currently keep their sons and daughters off the property ladder – forcing them into a lifetime of exorbitant rents – they’re going the right way about it.
