Last week the Government, during the Autumn Budget, renewed its promise to build 300,000 homes a year to meet the growing demand for housing. And while this sounds like pretty strong stuff, especially as it’s double that of the current building activity, something’s been niggling me. A) is 300,000 really enough and B) who is going to build them?
Now I know 300,000 sounds a lot, but has the Government really done its maths correctly?
Currently the UK population sits around 65million people and is expected to reach 70million before 2030. This means that on average the population will grow by around half a million a year. When you then look at the demographic make-up of those people, in relation to age, 53.5% of the UK population are aged between 20 and 59. Or to put it another way, 53.5% of the population are the right age to be buying homes. So if you work out what 53.5% of the growing population (500,000) will be, we’re saying that there will be around 267,500 additional home buyers floating around the market each and every year – so yes 300,000 is about right.
But and this is the crucial bit – what about those who currently don’t own a home and would like one? According to the English Housing Survey, as reported by the Guardian, an additional 22% of 25-34 years old have had to enter the rental market since 2006, instead of buying their first home, spending tens of thousands a year on rent – an equivalent to 185,000 people. This means that overnight we need 185,000 homes even before we embark on the building spree of 300,000!
Now on to B…
Who exactly is going to build them? Yes I know the answer is builders and developers but if we can only manage to build 150,000 homes a year currently, at an average completion rate of 12,500 a month and it takes around 32 weeks to build a house with bricks and mortar; slightly quicker if using offsite construction techniques, it feels like we’re going to need something fairly drastic to happen to meet this target.
Last week there was mention of an urgent review into how new homes are being delivered and why permissions are not being acted on – as currently 270,000 properties with planning permission are sitting un-built in London alone. Yes there may be a little bit of company politics going on as some decide to ‘manage’ their builds to ensure demand stays up; but we also have a genuine problem that there aren’t enough builders…current or coming.
The house building industry currently supports around 667,000 jobs; over 22% of construction staff are aged over 50 and 15% are in their 60s – meaning that within 10 years (around the same time the population hits 70million and we should have built 3million new homes), nearly a third of skilled workers will have retired or be very close to retirement. Alongside this, a fifth of all vacancies within the construction sector are persistent and hard to fill. Whereas some employment gaps have been filled in the past with overseas labourers, the uncertainty of BREXIT means this skills pool is not guaranteed, and while apprenticeships are excellent, we need qualified builders now.
So while I really do welcome the news that the Government wants to accelerate the building programme, and some of the measures announced last week, I hope that behind the headlines there are some actual details still to be considered, planned and released – which address the market and industry as a whole – as I really would like my children to buy a home soon and in the future, my grandchildren too.