Housebuilder October 2018

Housing Market Intelligence Report
Graph 8. What’s constraining housebuilding?
(% saying that factor is constraining production)
Graph 9. GDP growth rates (%) and forecast
100
80
60
40
20
0
Jun 06
Jun 08
Planning delays
Land availability
Jun 10
Graph 8: HBF quarterly survey of constraints on the production of new
homes. Source: Housing Market Report
Continued from page 30
quoted builders as an example, is that the level of
landbanks has settled at around 4.6 years at current
production, having risen to 6.4 in the recession. Given
production is still rising this suggests enough land
to cover about four years, assuming current growth
trends prevail.
This tends to suggest that the land market
is relatively benign from the perspective of
housebuilders, and while the normal gripes and
concerns over planning delays continue, there is a
general sense that land is not the problem it has been
in the past and, according to figures produced by
Savills, outside London land values are comfortably
below peak.
This view is reflected in the latest data from the
HBF survey published in Housing Market Report
(Graph 8). In terms of price and availability, land is
far less a concern than it was before the recession.
Given it is the key ingredient for housebuilding that
is an encouraging position. Planning delays remain
a top issue, but again their perceived constraint on
32 housebuilder october 2018
Jun 12
Labour availability
Land prices
Jun 14
Jun 16
Jun 18
3.0
2.5
2.0
1.5
1.0
0.5
0.0
production is less of a concern among housebuilders
than it was before the recession.
A more worrying issue, although it seems to have eased
slightly of late, is that of labour availability. This clearly
relates strongly to uncertainties generated by Brexit.
The construction industry more widely has issues
over labour supply, with an expected spike in the
number of older workers leaving the industry.
This, combined with a large proportion of younger
construction workers being from abroad, mainly from
eastern Europe, has led to major worries. Not only
might the industry lose older experienced workers,
the vast majority of whom are UK nationals, but it
might lose a large slice of its more youthful workers if
they choose to return to their homelands. Meanwhile,
the ready supply of workers from Europe may well be
compromised if migration rules are tightened.
That said, Britain’s top housebuilders have, however,
managed in recent years to boost their employment
levels roughly in line with increases in production.
And, taking the Housing Market Intelligence Top 75, the
Ave. 2000-07 Ave. 2013-17 Ave. 2018-20
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Graph 9: Annual rise in UK gross domestic product 2010 to 2017 with
consensus forecasts for 2018 to 2020 collated by HM Treasury
Source: ONS, HM Treasury
number employed rose by more than 6%.
But, it is not just a numbers game. The quality,
the experience and the training needed all must be
considered. What we are seeing, as these concerns grow,
is a growing interest in prefabrication – this is partly
a result of new entrants to the market with different
business models that are better able to capture the
benefits that come with off-site manufacture.
The issue of potential labour shortages is being
addressed by the industry both at a collective level
and within individual firms adapting, either through
initiatives to boost recruitment or through reducing
the labour intensity, turning to more off-site building
techniques. But it remains a concern.
economy
The plank on which the industry’s fortunes rest is
ultimately the economy. And as we see in Graph 9, not
only has economic growth eased over the past three
years, it is set to remain well below what might be
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