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300,000 new homes a year: an achievable goal?

Market Predictions

Getting tangled up in red tape is every small to medium builder and developer’s nightmare. Overly complex policies, unnecessary processes, outdated legacy systems and piles of local government paperwork all cause long, costly delays. This bureaucracy repeatedly threatens to pull focus from the job at hand – building homes and meeting the challenge of our national housing crisis.

CRL recently surveyed SME builders and developers to gain insight into the challenges and opportunities they face. The results clearly show the feelings and grievances experienced by those who are building the homes of tomorrow, today. One strong theme that emerged is the belief that there is inadequate support from those who set regulatory and legal stipulations and requirements. 53% of those surveyed described the government as either ‘unsupportive’ or ‘very unsupportive’. Just 2% thought legislators were ‘very supportive’ of the industry. There’s an inbuilt irony here: there is a radical disjuncture between the support expressed by policymakers for the building trade, and the level of practical help that they deliver.

Current legal frameworks are outdated and no longer fit for purpose. Government policy unfairly favours larger homebuilders over small to medium developers. Some of the steps that could be taken to correct this are simple. The government ought to minimise form-filling to allow contractors to focus on quality builds and workmanship. The government’s recent White Paper, ‘Fixing Our Broken Housing Market’ states that “The fundamentals of the Building Regulations system remain sound and important steps were taken in the last Parliament to rationalise housing standards.” Yet, there is still much progress to be made.

In her foreword for the White Paper, the Prime Minister promises the government will be “giving councils and developers the tools they need to build more swiftly” in order to “tackle unnecessary delays”. If this sentiment was translated into practical action, our industry would gain great momentum. Instead, one developer working on a project to construct just over 100 homes was faced with 40 different demands from the council that had to be met before the development could progress. These included:

Obtaining approval for roadworks; seeking permission to move any foliage that birds might use for nesting; erecting pre-approved fences around five silver birch trees; reporting on colours and other details of door, window, and garage lintels; submitting detailed drawings showing proposed brick types and design of windows, garage and house doors; taking steps to protect hedgehogs; protecting slow worms by filing an ecologist report; and building 10 bat boxes and 22 bird boxes.

I don’t want to trivialise the importance of some of these measures, but others seem overly onerous. What’s even more worrying is that this example is from three years ago and yet 39% of those we recently surveyed said they thought the government’s support had decreased over the years, with 32% claiming that it had stayed the same. In addition, the government has proposed reducing the time that builders have to work on projects that have gained planning permission to just two years, before permission is removed. Ministers have also proposed that developers which fail to construct homes quickly enough could have their land confiscated by local authorities.

In response, builders were keen to point out that there was a substantial difference between outline permission, where land for housing is approved by planners, and detailed permission, which is required for the builder to actually begin work. If the two-year deadline for work commencement was counted from the time outline permission was granted, many projects would be undeliverable.

We believe it’s vital to cut as much red tape as possible, without delay. This doesn’t mean cutting corners in terms of building quality, health and safety or building regulations. We are certainly not advocating buildings that are less structurally sound. Instead, we are simply calling for a reduction in the complexity involved in inspection and certification, to streamline the process. This will be of particular help to small to medium builders who don’t have the resources to deal with overly burdensome bureaucratic requirements.

It’s important to unshackle the construction industry. From the vantage point of a structural insurer, it’s straightforward: developers must be able to quickly and easily receive quotes, enjoy simple flat rate fees through easy payment methods, have reliable inspections with surveyors who cause minimal disruption and ultimately get their final certificates on time. In short, removing all the administrative headaches normally associated with the process, leaving these SMEs to focus on the job in hand.

There is one clear and optimistic note, though. Those surveyed remain confident about 2018, with 65% saying they are planning to build more homes than they did last year. Can the industry meet the government’s target of building 300,000 homes a year? The answer is an emphatic ‘yes’, but only when the barriers to building are removed, and red tape is purposefully pared back. We’re doing everything we can, it’s time for the government to do the same.

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