Less than four in 10 housebuilders have increased their output over the last year. Less than one in three think the government will meet its housebuilding targets. More than one in three say Brexit will hit their ability to recruit skilled workers

Building of new homes has fallen significantly since the EU referendum, according to a new survey of housebuilding companies published today.

Housebuilders are also sceptical that the government’s target of building one million new homes by 2020 will be met, the survey shows.

The poll of more than 400 housebuilding companies in England was carried out for McBains, the leading construction consulting and design agency, and provides an insight into the attitudes of the construction industry ahead of the Chancellor’s Budget Statement on 22 November.

The survey shows just 38% of respondents had increased their rate of housebuilding over the last year. This compares to 50% of housebuilders when asked the same question in a previous survey undertaken for McBains in May 2016 before the EU referendum.

London remains the area where the rate has increased most over the last year (50% of respondents said their rate of housebuilding had increased), but this is down compared to 2016 (when 60% of respondents said they had increased their rate).

Housebuilders blamed the decrease on a weakening of demand (38% of respondents), not enough skilled labour (22%), non-availability of finance (22%) and planning permission taking too long (22%).

The survey finds that only 30% of housebuilders think the government’s ambition of building a million homes by 2020 will be achieved.

The main reasons housebuilders think the target will not be met are: not enough land (48% of respondents), planning permission taking too long (41%) and non-availability of finance (37%).

Ahead of the Budget Statement on 22 November, the survey also asked housebuilders what they thought the government should do to increase housebuilding.

36% of respondents said it should release more publicly-owned land and 32% think they should incentivise large construction companies to develop more quickly.

Other findings from the survey show:

  • 52% of housebuilders are optimistic about the state of the housing market overall (18% are very optimistic) with this highest in London (65%);
  • asked what the biggest issue facing their company at the moment in terms of restricting the amount they can build, 28% of respondents cited land availability and 24% skills shortages;
  • the trades where those skills shortages are most acute is in general construction professions (33% of respondents) and bricklayers (17%);
  • the reliance of the housebuilding industry on skilled itinerant workers from outside the UK: on average, housebuilders say non-UK citizens account for 20% of their labour force but this increases to 33% in London – one in three of the workforce
  • 36% of respondents say they are worried about Brexit impacting the availability of workers because of freedom of movement restrictions (47% in London);
  • one in five housebuilders (26%) have found it harder to recruit staff from non-UK countries since the EU referendum, with this worst in London (38%);
  • half of housebuilders – and almost six in 10 in London – are also worried about the impact Brexit will have on their business in terms of fewer properties bought by overseas buyers.

Michael Thirkettle, Chief Executive of McBains, said:

“This survey shows the shadow of Brexit still looms large over the housebuilding industry.

“Uncertainty over the terms of EU withdrawal is having a real impact, with the survey showing a weakening of demand because UK investors are biding their time on committing to new projects leading to a fall in the rate of housebuilding.

“Not enough land is the reason most housebuilders think the government’s target for a million new homes to be built by 2020 won’t be achieved. The industry will be looking for the Budget to provide a shot in the arm such as freeing up more land, such as greenbelt, and simplifying planning permission.”

To find out more about the housebuilding survey please contact [email protected].

13th November 2017

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