How will the built environment sector meet housing targets in today’s changing landscape?

With the introduction of a new Government comes the introduction of a new housebuilding target. Labour’s aim is to build 1.5 million homes within five years. It also plans to restore mandatory housing targets, introduce a new Planning and Infrastructure Bill and reform the planning system. While many suggest the targets are ambitious, they are necessary for our growing population.

Delivering on this housing target leaves brings with it a number of challenges including – but not limited to – planning obstacles, building safety, changing legislation and Net Zero targets.

In light of these emerging challenges and opportunities in the built environment sector, and following conversations with our partners across the supply chain, we hosted a roundtable discussion to bring together architects, housebuilders, developers, trade organisations, and design professionals to share their insights and experiences.

This was a great opportunity for the group to discuss and share thoughts, and add insights on how we can ensure more sustainable practices. Everyone in the industry has a pivotal role to play in adapting to regulatory changes whilst also accelerating the move towards Net Zero.

Across four blog posts, we will share the discussions and insights from the session which will allow the sector’s stakeholders to play their part in meeting the housing targets. In the first part the group covers the lack of funding and scarcity of talent to reach the goals set.

Finding funding for housebuilding

The Office for Budget Responsibility (OBR) forecasts that only 1.1 million homes will be constructed during this parliamentary term, falling short of the five year target by nearly a third. This shortfall is attributed to several factors, including the absence of financial support programs like “Help to Buy,” which previously enabled first-time buyers to enter the market. The lack of such initiatives has diminished the industry’s capacity to invest in new developments, limiting the housing supply.

However, the government is expected to introduce funding measures to meet its new homes goal in the Spring 2025 budget. Building on the £500 million pledged for the Affordable Homes Programme, which aims to deliver up to 5,000 additional affordable homes, it is clear that an extra stimulus is needed. The roundtable group agreed that Labour must outline further financial commitments to sustain and expand UK housing development efforts.

The general consensus amongst the group was that meeting the target would be a stretch. However, there is a general feeling of optimism that with the new government’s increased ability to borrow, there will be a significant allocation for housing announced in the spring statement. The government’s new phrasing of social housing as national infrastructure was also favoured by our panel, as this is likely to see social housing receive more funding.

Ben Lovedale, Associate Partner at Sheppard Robson commented:

“We’re optimistic about the future and are looking forward to seeing things improve, but whether we can hit the 1.5 million homes target is questionable. We welcome the ambitious mindset, but, these strategic targets are often missed, so we will wait to see how it unfolds.

 

“Day-to-day we see the complexity around the intersection of targets, policy requirements, site-specific issues. It will be interesting to see the strategic vision unfold and how the Government handles the juncture of planning officers, committees and politicians. We remain optimistic and hope to push things through.”

Andrew Savege, Business Development Director at Wates Group, was positive about a cash injection for social housing as recent commentary around the sector has alluded to the additional investment being made available to stimulate building in 2025.

“The root of the housebuilding issue is money. The new government has increased its ability to borrow and there is optimism that there will be a significant allocation for housing announced in the spring spending statement.

 

“The government’s recent phrasing of social housing as national and critical infrastructure is positive. With this badge it is positioned as essential rather than nice to have and moves it into a bracket that is likely to see it get more funding.”

Katie Cairns, Passive House certified designer, Associate and Head of Sustainability at Assael Architecture, agreed in feeling optimistic that meeting the targets would be possible and achievable, but she feels that the construction and heating industry seems quite slow to change in comparison to other sectors, commenting:

 “If you look at the automotive and manufacturing sectors, they seem to be a lot more nimble or quick to change their technologies. New improvements happen much faster than in the house building sector. Whereas it often feels like we’re still building with the similar technologies that we used fifty years ago.

 

“There needs to be a cultural shift to change the way that we’re building and to increase our skill sets. Rather than waiting for the Government to bring about change, the industry needs to do what it can to reach the targets independently. This will allow us to build in a sustainable way and with high levels of performance.”

Solving the skills shortage will speed up progress

A key contributor to meeting the house building targets is having the talent within the sector. However, the sector is facing a shortage of skilled labour adding further strain to current and future efforts. The Home Builders Federation highlights that tens of thousands of new recruits are needed across various trades to meet the government’s housing targets. To address the bottleneck at council level the government has pledged an additional £100 million to bolster local planning departments. Although this is just one area where delays occur.

Senior industry leaders at the roundtable were sceptical about the sufficiency of this funding, and the time it takes for the impacts of funding to be felt. This also emphasises the need for comprehensive financial strategies and supportive policies to ensure the successful delivery of the proposed housing projects at each stage of the planning and construction process.

One of the prominent talking points during the roundtable was around the skills shortage within the construction industry and how this can be improved. The key points highlighted at the roundtable included:

• Overcoming the skills gap is also essential to meeting new targets. Currently there isn’t an adequate pipeline of young talent being brought into the industry to meet targets.
• Education delivery is also a problem. There aren’t enough tutors with practical experience to teach future generations. This is a big challenge for the industry.
• Apprentices must be incentivised otherwise young people will choose other vocations. How do organisations do this?
• More focus needs to be placed on wages. Apprenticeship wages are prohibitive to new talent entering the industry. Higher cost of living in London adds more pressure to the problem too.

Danielle Buckley, Regional Social Values Manager at Wates Group, said that there needs to be a greater focus on bringing academic and practice together, commenting:

“The problem we have is that a student is faced with the same cost-of-living pressures as an adult. So, if you take a typical 18-year-old for example, there are a lot of households, especially in London that can’t afford for their child to go to college – as they need them to be out working. If the wages for apprenticeships were increased, young people would be more enticed to undertake them.

 

“Blended learning is great but few can afford to be on an apprenticeship wage at £5 per hour over the age of 16, especially if you’ve got to contribute to a household in some capacity.

 

“One solution is to get rid of the apprenticeship wage. A skills shortage and a cost-of-living crisis at the same time means that young people can’t afford to train. I love the thought of blended learning but the attraction to apprenticeships isn’t there because people can’t afford to earn low salaries. If apprenticeships and training roles started at a better salary, it would allow those who are struggling to earn a suitable wage to remain in the industry.”

In the next blog post in our roundtable series, will we look at the thoughts on planning reforms to greenbelt and brownfield sites, as well as the current regulatory landscape and firms’ preparedness to deal with new regulations.

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