Neil Jefferson is Chief Executive of the Home Builders Federation, having previously joined the organisation as Managing Director in January 2020. In addition, he is a Board Member of the Future Homes Hub, of which he was a founding director in 2021. Prior to joining HBF, Neil was Chief Operating Officer of new home warranty provider, NHBC. Between 2008 and 2016, he was seconded as Chief Executive of the Zero Carbon Hub, providing leadership in the government’s vision for zero carbon homes. Neil is also a Chartered Builder.
The Home Builders Federation recently published an updated version of our ‘Economic Footprint of Home Building’ report, quantifying a range of contributions that the industry makes to the economy, jobs and communities.
The report found that the amount generated by the industry has increased significantly since this work was last undertaken in 2018, with the 226,000 homes delivered last year generating £50bn of economic output and supporting almost 800,000 jobs.
The report, produced by Lichfields for HBF and in association with United Trust Bank, starkly illustrates how important supporting increases in housing delivery is, not only for tackling the housing crisis but for all the other contributions that come with it.
If the 1.5 million homes over the course of this Parliament target is met, this will equate to:
• 1,043,000 jobs supported each year, including 10,250 graduate and
apprenticeship positions.
• £330 billion generated in economic activity
• £67.5 billion for affordable housing
• £42.5 billion spending in local shops.
• £40 billion in tax receipts, including £3 billion in additional council tax
• £9.4 billion in funding for infrastructure, including £4.2 billion for new
and improved schools
• £1.35 billion in spending for open spaces
Over the course of the last Parliament, 1 million homes were built. If successful, Labour’s plans would see an additional 50% of homes built, and so an additional 50% of contributions from the home building industry. This equates to:
• 347,500 jobs each year, including 3,417 graduate and apprentices
• £111 billion in economic activity
• £19 billion for affordable housing
• £14 billion spending in local shops
• £13 billion in tax receipts, including £1 billion in council tax
• £3.1 billion in funding for infrastructure, including £1.4 billion
on new and improved schools
• £450 million in funding for open spaces
The Labour Party was elected on a platform that promised to prioritise growth, and this was cemented by the Chancellor of the Exchequer’s speech on the first working day of the new Government which put planning reform at the centre of achieving a dynamic, modern and growing economy. The reforms to the planning system announced by the Government so far have been welcomed by the industry. As well as supporting increased housing output, it is also just refreshing to hear policymakers acknowledge how central our industry is to the Growth Mission.
There is, however, always more that needs to be done if these aims are going to be achieved.
Firstly, ongoing problems on the demand side of the equation will constraint housing delivery. Builders can only build if buyers can buy, but with higher house prices, higher mortgage rates and no first time buyer support scheme in place, home ownership is becoming increasingly unaffordable and stifling the market. The industry needs a level of confidence in demand to commit to make the significant investment in land, planning permissions and people needed to build more new homes.
Secondly,160,000+ homes remain blocked due to nutrient neutrality restrictions. In the weeks following the election, a letter from Housing Secretary Angela Rayner and Environment Secretary Steve Reed to environmental NGOs implied that a solution might be in the pipeline. However, months down the line, we are still without any proper detail of what this may contain or when it might come forward.
We also need to see Local Authority planning department capacity being such that they can process applications to the point where construction work can actually start in a realistic timeframe.
On top of this, there are ongoing issues in the S106 market, there is still a significant skills gap, and the number of active SME home builders continues to fall as a result of the increasingly bureaucratic and regulatory operating environment and the crippling delays in the planning process.
The industry stands ready to support the Government with its growth and housing ambitions. However, as a result of the last Government’s approach and some of the issues listed here, the last few years have seen planning permissions drop to record lows and organisations scale back their operations. Planning reform is a great first step, but it is not a silver bullet to resolving the housing crisis. If the Government does not acknowledge all of these issues then it risks missing its housing delivery ambitions, as well as all of the hugely important and much needed economic and social benefits that new homes bring.