Politicians and business leaders plan a way forward for housebuilders

24 July 2020

Politicians and business leaders plan a way forward for housebuilders

More than 70 business leaders and construction industry professionals, from across the Midlands and East of England, met at a virtual conference to discuss the future of housebuilding in the wake of Covid-19.

The event – titled ‘Covid-19 – meeting the challenges of housebuilding recovery’ – was hosted by The Larkfleet Group of Companies, which includes housebuilders Larkfleet Homes and Allison Homes.

Speakers at the event – now in its fifth year – included Larkfleet Group Chairman Karl Hick, Andrew Lewer MBE, MP for Northampton South, Ben Rudd, Associate Director, Development, at Savills, and Kelham Cooke, the Leader of South Kesteven District Council.

The conference, held on 22 July, attracted delegates from the public and private housing sectors, including planners, estate agents, surveyors, builders and developers.

In a series of presentations and discussion sessions, the conference examined the recovery challenges facing the housebuilding industry. Topics discussed included the proposed changes to the planning system, how district councils can assist with the delivery of housing targets and the state of the land market. 

Karl Hick opened by raising several important issues. He said: “The government has been clear that recovery in the construction industry is fundamental in terms of boosting the economy, providing jobs and delivering new homes. 

“We welcome the Business and Planning Bill, including measures to extend planning permission deadlines so that projects put on hold because of Covid-19 can still be delivered, as well as the new flexible working hours on construction sites to enable us to get our teams back to work safely. 

“However, we need to work together to urge the government to extend the Help to Buy scheme. It would be fair to say 80 per cent of sales relate to HTB, so sales would drop to 20 per cent without it. This would be disastrous for the housebuilding industry, the economy and people desperate to buy a new home – and would derail the government’s recovery plans.

“The government also needs to help SME builders to deliver the energy-saving initiatives set out in the Future Homes Standard to reduce carbon emissions from new buildings. This is a tricky one for me. Larkfleet Homes is probably the most sustainable builder in the UK, but we struggle to deliver some of the environmental initiatives because sale values would not cover the additional costs. It is a complicated issue as housebuilders in some areas of the UK will be able to afford it, because of land and house values.”

Andrew Lewer also chairs the All-Party Parliamentary Group for SME House Builders, which was set up look at the issues home builders are facing, via the planning process, in delivering the government’s target of 300,000 new houses a year. It aims to provide answers to parliament and government on how England can provide more and better new homes, primarily through SME builders and developers.

Mr Lewer started by thanking Mr Hick for his contribution to the all-party group.

He said: “Lobbying by the big builders is focused on them, so SME housebuilders need their own voice. We have nearly 200 participants from all over the country coming to parliamentary meetings, so we are gathering a body of evidence from the people who are actually involved in delivering housing.

“We have just published a report on ways to improve the planning system in the UK, and this will be put to ministers in terms of detailed recommendations.”

Cllr Kelham Cooke, Leader of South Kesteven District Council said: “In January, we adopted the South Kesteven Local Plan, which set out the need to deliver an average of 650 homes a year by 2036 - or 14,000 homes within that period.  This represents an increase of nearly 25% of homes in our district.  Clearly this is an immense challenge, but it is one I am determined to meet.

“However, we can’t do this alone.  As a partner, we bring to the table the ability to create the right environment within which you can thrive and prosper. You bring to the table your considerable skills, knowledge, and expertise to turn the opportunity we create into reality.”

Ben Rudd from Savills said that post-lockdown “many housebuilders have been trying to do land sales with a Covid clause, allowing them to terminate if conditions worsen during the buying stage.

“Most builders have restarted construction, though generally at a slower pace because of Covid restrictions. This will slow the pace of delivery of homes to the market but could protect prices.”

Mr Rudd said that many sales are completing now lockdown has been eased, due to pent-up demand.

He added: “People are considering their home and office environment more. This may suggest a move from city centre apartments to more rural homes and family houses.”

Sam Hart, Director of Sales at Larkfleet Homes, said: “The market has held up and we’ve seen a bounce-back in inquiries and reservations. Whether this will continue, we will have to see. We need Help to Buy to be extended. This initiative is not just about first-time buyers, but second-timers too. Help to Buy will be the key driver to keep the market stable so that we can continue delivering homes for all.”

Further discussions were had about the importance of creating garden villages, such as the garden village at Spitalgate, near Grantham, and SKDC’s partnership with Burghley in Stamford to bring forward an exemplar mixed-use development at St Martin’s Park.

Karl Hick concluded the conference by referencing further challenges facing the housebuilding industry.

He said: “I think one of the issues, as we come into Brexit is that some reports said it would cost up to £200 billion to manage the divorce and that would have been possible with the funding we had pre-Covid. But now that we have a massive shortfall as a result of coronavirus, does the government borrow another £200 billion? What will be the repercussions of the Chinese dispute for the UK economy? Combined with coronavirus, these factors mean we have a perfect storm coming and it is a big concern.” 

He added that national, globally-acclaimed projects such as HS2 and the expansion of Heathrow airport are “massively important to keep UK PLC stable internally and open for business externally”.