housing shortage

Skills shortage will hamper housing delivery, FMB research reveals

Small house builders predict that skills shortages in the building industry will hamper housing delivery and will eventually overtake access to finance as a bigger barrier to building new homes, according to new research by the Federation of Master Builders (FMB). Key results from the FMB’s House Builders’ Survey 2018,

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L&G to Move Into Flat Pack Houses Market

Financial services multinational Legal & General (L&G) announced last month that it plans to move into the flat pack houses market. The company, known for its insurance and investment services, plans to build thousands of prefabricated homes every year in the UK. The company is one of several large brands

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Asking Prices and Housing Sales on the Rise

According the latest figured released in the national index, it has been reported that the property market has seen a surge in both asking prices and sales across the UK as a whole. With asking prices rising slightly across all areas of the UK, there is the notion that the

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Latest Issue
Issue 325 : Feb 2025

housing shortage

Skills shortage will hamper housing delivery, FMB research reveals

Small house builders predict that skills shortages in the building industry will hamper housing delivery and will eventually overtake access to finance as a bigger barrier to building new homes, according to new research by the Federation of Master Builders (FMB). Key results from the FMB’s House Builders’ Survey 2018, the only annual assessment of small and medium sized (SME) house builders in England, include: • The percentage of SME house builders saying that a shortage of skilled workers is a major barrier to their ability to build more new homes rose to 44% (up from 42% in 2017); • A lack of available and viable land tops the list as the most commonly cited barrier (59%) to increasing housing delivery and almost two-thirds of SME house builders (62%) believe that the number of opportunities for small site development are actually decreasing (up from 54% in 2017); • Nearly half of small house builders (46%) say access to finance is a major barrier to their ability to build more new homes; • More than half (51%) of SME house builders view the planning system as a major constraint on their ability to grow and ‘inadequate resourcing of planning departments’ was again rated as the most significant cause of delay in the planning application process for the third year in a row; • When asked to look ahead over the next three years, more firms cited skills shortages as a likely barrier to growth than access to finance. Brian Berry, Chief Executive of the FMB, said: “Nearly half of builders believe the skills shortage is a major barrier to their ability to build new homes. The construction sector is heavily reliant on EU workers with just under one in ten workers in the sector born in the EU. Brexit, coupled with the end of free movement, threatens to further intensify the skills shortages we already face. Given that the UK will leave the EU in less than six months, house builders are understandably concerned that skills shortages could worsen and choke housing delivery. In order to combat this skills crisis, the construction industry needs to encourage more entrants into the industry and develop higher quality qualifications. It is critical therefore that the Government doesn’t pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.” Berry continued: “Our research also shows that the Government must continue to address the issue of access to finance for SME house builders. Although concerns over access to finance have eased slightly in recent years, in part thanks to the Government’s funding schemes such as the Home Building Fund, there is more that can be done. Our research suggests that it is the low percentages of project cost that builders are able to borrow that remain the greatest financial barrier to increasing their levels of house building. This latest research suggests that if firms were able to borrow 80 per cent, rather than the current 60 to 65 per cent of project cost, SME builders would be able to bring forward on average 40 per cent more new homes. Given the ambitious house building targets the Government is working towards, we cannot afford to ignore such a chance to significantly increase housing delivery.” Berry concluded: “A lack of available and viable small sites tops the list of frustrations for SME house builders for the fourth year in a row. Worse still, nearly two-thirds of these small builders believe that the number of opportunities for small site development are decreasing. However, the recent reforms to the National Planning Policy Framework, which specify that 10 per cent of a local authority’s housing delivery must be on sites no larger than one hectare, will help to address this problem. This will help to speed up the delivery of homes and lead to a more diverse and resilient housing supply.”

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L&G to Move Into Flat Pack Houses Market

Financial services multinational Legal & General (L&G) announced last month that it plans to move into the flat pack houses market. The company, known for its insurance and investment services, plans to build thousands of prefabricated homes every year in the UK. The company is one of several large brands to make a move into the flat pack home market in response to the growing shortage of houses across the UK. In 2012, Ikea announced the Aktiv — its $86,000 flat pack house built in partnership with Oregon architectural firm Ideabox. L&G’s homes will be built through a company called L&G Homes at a factory in North Yorkshire, according to the Financial Times. The insurance giant also owns a 46.5% share of home builder CALA Homes, which purchased competitor Banner Homes in 2014 in an estimated £200m deal. The homes will be constructed in North Yorkshire and transported to sites across the country as part of the company’s operations. The flat pack construction and transportation process leads to significant savings compared to traditional construction, reducing costs for home buyers. Flat pack houses are viewed by many in the construction and housing industries as a practical way to increase the number of new homes built throughout the UK, after Minister of State for Housing Brandon Lewis announced an ambitious target of one million new homes by 2020. They’ve also attracted the attention of open source enthusiasts and technology evangelists. An open source building system called WikiHouse, launched in 2011 in South Korea, offers digital plans for flat pack houses to be shared online using the Creative Commons license. Real estate industry analysts believe that L&G’s entry into the flat pack homes market could be a trigger for other companies to make similar decisions, particularly as home builders ramp up their efforts to build throughout the UK.

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Asking Prices and Housing Sales on the Rise

According the latest figured released in the national index, it has been reported that the property market has seen a surge in both asking prices and sales across the UK as a whole. With asking prices rising slightly across all areas of the UK, there is the notion that the housing market is continuing to maintain a positive outlook, yet, at the same time it is worthwhile to note that the average yearly increase in price across both England and Wales actually saw a reduced rate of growth, sitting at some 7%. The largest increase in average property prices was observed in the West Midlands, where a month-on-month rise has been observed of approximately 1.5% – this being attributed primarily to the imbalance of demand and supply in the West Midlands, with a 4% year on year decrease in supply. Yet, with demand maintaining continued growth due to population expansion, concerns may be raised as to the comparative affordability of West Midlands properties in the years to come. On a more positive note however, it has been reported that homes are selling at an increased pace, with the average time that a property is on the market reducing by approximately 17 days from this time last year (now presently clocking in at some 102 days on average). This has been highlighted most aptly in the East of England, London and the South East, where buyers have been reportedly “snapping up” properties at a speed most recognisable with that of the housing boon. Within the North and across Wales however, prices have reportedly risen, yet the marketing times associated with the average property remain as the longest witnessed in the UK. Yet, growth in both pricing and sales is portrayed to be far more sustainable in these areas, with relatively modest increases as the supply and demand balance remains relatively in check; sometimes, smaller, more steady change can be far easier to handle.

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