CEO warns funding issues and skills gap could derail housing targets

7 August 2020

Industry and government need to tackle the skills gap in construction and unlock funding constraints if plans to speed up home building are to be effective.

The government has published the most radical overhaul of the English planning system in a generation, in a move to accelerate the delivery of urgently needed new homes. Housing Minister Robert Jenrick said reforms in the Planning for the Future white paper would produce high quality, sustainable homes on land labelled for growth, renewal or protection. 

Housing ministers claimed the planning overhaul is intended to help SME housebuilders, with plans to make the housing industry “more diverse and competitive to drive delivery and higher standards”.

Larkfleet CEO John Anderson said: “These proposals are certainly positive step forward and they underpin how serious the government is about tackling the barriers that are holding back the housing market. 

“The reforms may also provide a boost for SME housebuilders, but there remains the huge hurdle of funding for the SME market which must be addressed. The government and Homes England are making all the right noises, but we need to encourage lenders to increase the availability of higher LTC (loan to cost ratio) debt – perhaps by introducing government-backed indemnities for lenders.”

Mr Anderson also raised concerns about the continuing skills gap housebuilders are facing. 

He said: “If we are to accelerate housing delivery, we must also have a solution for the severe shortage of skilled construction workers to meet the government’s housing target. The new immigration policy will inevitably restrict the skills needed to supplement our homegrown skills, so we need to invest in education and training for both technical and non-technical construction skills.

“I welcome many aspects of the proposals, especially the presumption for development in designated growth areas, the simplification of Local Plans and the speeding up of the decision making process. 

“These reforms are long overdue. We urgently need a planning system that is agile, transparent and fit for purpose for present and future generations.

“However, it will be impossible for SME housebuilders to increase their development schedules without a serious review of how new projects can be funded and how they can be built given the acute shortage of construction workers.”

The consultation on the housing ministry’s wide-ranging measures closes on October 29.