Spring Snub: How Homebuilders Can Combat the Lack of Support in the Spring Budget
Unsurprisingly, the UK property industry was disappointed with the latest Budget, which failed to provide the much-needed support for the sector.
The lack of support in the latest Budget has been a blow to the UK property industry, which is struggling to meet its housebuilding targets. Housebuilders are concerned that the lack of support from the government will make it even harder for them to meet the target of building 300,000 new homes a year, having been 120,000 short of the target in 2021.
To illustrate the scale of the frustration in response to the Budget, the Home Builders Federation (HBF), Close Brothers Property Finance and Travis Perkins conducted a joint survey that found that 90% of small and medium-sized enterprises (SMEs) in the UK housing industry are unhappy with the government's housing policies. SMEs in the housing industry are struggling to navigate complex planning regulations and secure land, while projects are also being hindered by staff shortages and rising materials and energy costs.
The struggles aren’t exclusive to SMEs, either. Some of the UK’s biggest housebuilders have announced cutbacks during this downturn, in a move that won’t inspire optimism amongst industry peers.
Despite the challenges faced by homebuilders, there are actions that can be taken to address their concerns and support the growth of the industry. Here are some steps that housebuilders can take to address concerns and boost chances of an industry revival:
Engage with MPs and Ministers
Housebuilders can make their voice heard by engaging with their local MPs and ministers responsible for housing. They can share their concerns about the lack of support in the latest Budget and discuss the specific measures that they believe would be most helpful. Research by industry bodies, such as the aforementioned SME State of Play Report, adds credence to such concerns and puts the pressure on Government intervention.
Work With Trade Associations
Housebuilders can work with trade associations, such as the HBF and the National House-Building Council (NHBC), to lobby the government on behalf of the industry. These associations can represent the collective views of the industry and provide a unified voice that is more likely to be heard by the government. An extensive list of trade associations and industry groups can be found here.
Highlight the Economic Benefits of Housebuilding
Housebuilders can also highlight the economic benefits of housebuilding, such as the creation of jobs and the boost to local economies. This can help to persuade the government of the importance of providing support to the industry. Running comprehensive campaigns around this again shifts the onus to the government to at least address the reasons for the lack of support, when the housebuilding industry is so integral to the wider economic performance.
Innovate and Adapt
Housebuilders can also innovate and adapt to the changing demands of the market. This can involve developing new technologies and building methods that reduce costs and increase efficiency. It can also involve exploring new markets and identifying new opportunities for growth. This may seem like an oversimplified solution but with PropTech evolving at such an incredible rate – not to mention the seemingly hourly advances in AI capability, finding ways to streamline tasks through technology could help cut overheads, and potentially facilitate more building opportunities.
Address the Skills Shortage
Training programmes to address the skills shortage in the industry could also be implemented to help SMEs find and retain skilled workers. We recently wrote a blog about what housebuilders can do to encourage more workers into the construction industry, including examples of existing initiatives that are paving the way for the future of the industry.
Levelling Up Home Builders Fund
The latest budget may have lacked support for housebuilders but SMEs can apply for development loans through the government’s Levelling Up Home Building Fund to kickstart projects, with loans starting from £250,000.
The concerns raised by SMEs in the housing industry highlight the need for more government support for small developers, while even resilient housebuilders are looking to ride out the economic uncertainty. While many would argue for government intervention to help the industry get back on its feet, this doesn’t appear to be immediately forthcoming. The challenge therefore falls to housebuilders to collectively highlight the disparity between funding and housing targets.