A severe shortage of skilled workers in the housebuilding industry – and the current planning system – is hindering efforts to tackle the UK’s housing crisis, according to major new research released by Lloyds Bank.
The first Lloyds Bank Commercial Banking report on the UK housebuilding sector, ‘Building for Growth’, analyses the state of the industry today and the opportunities and challenges it faces in the future.
It surveyed those within the housing supply chain, from SME contractors to major national developers and found real concern among these businesses on the effect of the sector’s skills shortage – not only on individual firms, but also on national housebuilding rates and the UK economy as a whole.
On a more positive note, the research did find some approval for measures announced in the Summer Budget designed to tackle the current housing shortage, for example, plans to grant automatic planning permission for building projects on disused industrial sites.
Tackling the housing crisis: the barriers
While the pace of housebuilding is generally acknowledged to be improving, there remains much discussion about how it can be accelerated to match demand. According to the report, there are a number of key issues preventing the effective tackling of the housing shortage, including slow planning decisions (46%), public opposition to development (42%) and lack of skilled workers (25%).
Indeed, a quarter (24%) said the skills shortage is the biggest broader challenge currently facing their business. More than a third (35%) believe there is a lack of suitable candidates to fill existing and new jobs.
Housebuilders said the skills shortage is most acute among electricians and site managers (both 34%), with project managers (33%), quantity surveyors (31%) and architects (31%) following closely behind – reflecting the supply chain-wide nature of the problem.
Overcoming the challenges
Housebuilders appear to be taking steps to redress the balance, with 31 per cent prioritising investment in recruiting apprentices in an effort to increase the pipeline of talent coming into the industry.
When asked what one change housebuilders would advocate for the alleviation of the housing shortage, 23% said greater local authority support to promote and fund building projects, while the same figure sought additional government support.
Existing government schemes; Stamp Duty reform and the Help to Buy equity scheme; were flagged by 73% and 63% respectively as having a positive impact on the housing crisis.
A note of optimism
Despite the challenges cited in the report, housebuilders seem to be optimistic about the future, with respondents giving an average score of seven out of ten when asked to rate their confidence in the success of the UK housebuilding industry in the future.
87% of respondents want to create new jobs in the next 12 months, and if replicated across the industry, this could mean the creation of more than 100,000 new housebuilding roles.
Alasdair Gardner, head of housebuilders, Lloyds Bank Commercial Banking, said “This report sheds light on the key areas of support that firms in the sector need to ensure the long-term success and sustainability of the industry. Clearly, housebuilders are very concerned about the barriers preventing them from playing a role in alleviating the housing shortage.
“Lloyds Bank is committed to helping housebuilders achieve their ambitions for growth, and meet the needs of the nation in terms of building new, affordable housing. Indeed, in January, the Lloyds Banking Group Commission on Housing launched an independent report that set out a roadmap towards the sustained supply of good quality new homes."
“Housebuilders told us that slow planning decisions are a challenge, something the commission reflected in its call for clearer targets for local authorities on planning process timeframe."
“Clearly, skills is also a huge concern for industry operators too. Our £100m Government-Lloyds Banking Group Housing Growth Partnership will be used to help SME builders invest in new projects and develop their businesses, allowing them to recruit and train the skilled workers so vital to the prosperity of the housebuilding sector, and the nation.”
To read the full report, click here.