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There’s no silver bullet to meet growing housing demand

(Tony Watson / Alamy Stock Photo)

3 min read

The challenges facing the housing market are well documented; too many people are living in expensive, unsuitable, poor-quality homes.

The government has set itself an ambitious target of 300,000 net additions a year. The Built Environment Committee’s report on meeting housing demand may have been published over a year ago, but many of its findings and recommendations remain relevant. We need to build houses of all tenures, of a good quality and in the right places to meet housing demand. 

Unfortunately, there is no silver bullet to delivering the homes the country needs. Following evidence from nearly 130 individuals and organisations, we identified three key barriers to building more homes: a collapse in SME housebuilders; skills shortages; and uncertainties about the future planning system. These challenges must be addressed to boost housing supply and meet the government’s targets in the years ahead.  

The role of SMEs in the housebuilding industry has substantially reduced. In 1988, SME housebuilders contributed 39 per cent of new homes annually, but recently this has fallen to 10 per cent. Incentivising SME housebuilders would diversify the market and maintain competition but to do this they will need support through reduced planning risk, having access to more small sites and increased access to finance. The government can work with planning authorities and its own bodies such as Homes England to increase the percentage of homes on larger sites which are built by SME housebuilders through adoption of the master developer model. 

Construction skills shortages have not been sufficiently addressed over many years. We heard evidence of vacancies in construction, manufacturing, and skilled trades. These, combined with significant shortages in the planning sector, are hindering growth and the delivery of new homes. The built environment is an exciting sector to work in, with a huge range of opportunities for young people, but we found that introducing technical qualifications at 16 years old is too late to capture their interest. Earlier exposure to the built environment should supplement upskilling and reskilling within the sector itself and a drive towards modern methods of construction as routes to address the skills shortage.  

Finally, we heard that delays to planning reforms have a “chilling effect” on housebuilding. Local plans are often out of date and unclear, with Section 106 and Community Infrastructure Levy (CIL) agreements only adding to that complexity. Local plans need to be simpler, clearer, and more transparent. We look forward to scrutinising the Levelling Up and Regeneration Bill and hope to see improvements in local plan making as a result of the government’s work.  

Local plans need to be simpler, clearer, and more transparent

It should not be ignored that what we build as a country is just as important as how much we build. The United Kingdom has an ageing population: one in four people will be over 65 by 2050 and increased numbers of older people are living alone. These trends should be reflected in the types of new homes built, including specialist housing for later living. As more information becomes available from the 2021 census the government, developers, and local authorities should respond to demographic shifts and ensure that in addressing the UK’s growing housing demand they are building for the future.  

Our report, Meeting Housing Demand, provided a wide-reaching package of proposals for the government to take forward; from large strategic changes through to smaller alterations within existing systems. Members of the committee continue to engage in these issues throughout the passage of the Levelling Up and Regeneration Bill.  

Our new inquiry considering the impact of environmental regulations on development launched on 23 February. 

Lord Moylan is a Conservative peer and chair of the House of Lords’ Built Environment Committee 

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