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Housebuilding soars to highest levels in almost a decade

The number of new build homes that have started to be built has surged to the highest level since 2008, as shown by government figures.

The latest housebuilding data shows that 164,960 new homes were started in the year to June 2017, up 13% on the previous year, and have increased by more than three-quarters since the low in 2009.

More than 153,000 new homes have been completed during the same period, showing an increase of 11% compared with the year before.

Housing and Planning Minister Alok Sharma said “Building more homes is an absolute priority for this government. Today’s figures are proof that we are getting Britain building again, with new housing starts reaching record levels since 2009.

“It’s vital we maintain this momentum to deliver more quality homes in the places that people want to live. Our housing white paper set out an ambitious package of long-term reforms to do just that.”

The figures demonstrate strong growth in housebuilding right across the country, with Gloucestershire, South Derbyshire and South Norfolk amongst the strongest areas in delivering high levels of starts.

The government’s housing white paper sets out bold new plans to fix the broken housing market and build more homes across England.

At Autumn Statement, an additional £1.4 billion investment was announced for the government’s affordable housing programme, increasing the total budget to £7.1 billion. Since 2010, almost 333,000 affordable homes have been delivered, including 240,000 affordable homes for rent.

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Government injects £65 million to support UK’s largest Build to Rent site

The biggest development of homes built specifically for private rent in the UK is set to receive a £65 million boost from the government.

The deal will help to unlock over 7,600 new, high quality homes at the Wembley Park development in Brent, London – one of the largest strategic regeneration projects in the country. At least 6,800 of these homes will be for rent.

The measures include:

  • changing planning rules so councils proactively plan for more Build to Rent homes where there is need
  • making it easier for Build to Rent developers to offer affordable private rent in place of other types of affordable home
  • introducing longer tenancies which are more family friendly to provide better security for renters – government action in this area has already seen the offer of 3 year or longer tenancies being made available to 35,000 tenants across the country according to British Property Federation estimates.
  • Build to Rent homes are built at scale for the primary purpose of being rented long-term, they can boost choice and quality in the private rented sector.

Across England the sector is expanding, with 80,855 homes either completed or planned. The industry estimates investment in the private rented sector could grow to £70 billion by 2022. This could provide a further 15,000 homes each year – with the potential to reach at least 240,000 homes built specifically for private rent – by 2030.

Housing and Planning Minister Alok Sharma said “Whether renting or owning all families should have the security they need to be able to plan for the future.

“That’s why as part of our plan to fix the broken housing market we’ve been taking action to create a bigger and better private rental market, supporting new Build to Rent developments so that tenants can have greater choice.

“Developments like Wembley Park are a great example of doing just that, boosting the choice and quality of homes on the market – meeting the needs of renters in cities and towns across England.”

The Wembley Park development is backed by a loan from the government’s £3 billion Home Building Fund. It will bring over 8,000 jobs to the area and support infrastructure to free up land for development.

Delivered in phases over the next 7 years, the flats will include a mix of studios, 1, 2 or 3-bedroom properties, all located closely to the underground station. The site next to the National Stadium will also include up to 2,350 affordable homes.

Homes and Communities Agency (HCA) Chief Executive Nick Walkely said “This autumn, the HCA will relaunch as Homes England with the ambition of creating a better housing market. We’re determined to get more homes built now and increase the rate of future development.

“This development is a fantastic example of how we fund vital infrastructure to speed up the construction of much-needed quality homes for people to rent.”

Quintain Chief Executive, Angus Dodd said “This £65 million government loan will be match funded by Quintain to provide a £130 million infrastructure investment into Wembley Park to deliver new car and coach parking, an energy centre and the first phase of the new 7 acre public park. Not only will this funding allow these critical elements to be brought forward, it will also support the more rapid delivery of new homes.

“We are delighted to welcome the Housing Minister to Wembley Park today. The area is already home to a thriving community and will become the largest build to rent development anywhere in the UK.”

Work on the new homes at Wembley Park has already begun and is set to be completed in 2026.

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Legal & General unveils turn-key modular housing prototype

Legal & General (L&G) has revealed its first turn-key modular housing prototype as it continues to drive the evolution of the housing sector to help tackle the UK’s long term chronic production problem.

Located outside its 550,000 sq ft factory in Selby, near Leeds, the prototype is a two-storey, two-bedroom home. Exploring a range of designs, L&G expects to deliver its first homes in the first half of next year. The Leeds site is building the capacity to produce thousands of homes per year across 8 production lines, employing several hundred local people.

Modular building is quicker and more efficient than traditional house building, delivering homes in a matter of weeks rather than years to consistently high standards. This is achieved by building precision-engineered homes in a factory environment, ensuring accuracy of build, in dry controlled conditions, using state of the art methods and materials. The manufacturing process is highly energy efficient and will be carried out by a stable trained workforce. Constructing the homes from Cross Laminated Timber (CLT), delivers further environmental benefits by storing 1 tonne of CO2 in every m3 of CLT used in the construction of each home. This ensures an economically viable and sustainable solution to deliver much needed capacity for the industry.

Rosie Toogood, CEO of L&G Modular, commented: “The unveiling our first prototype today marks an exciting and important step in our programme to bring modular homes constructed from CLT to market. This prototype demonstrates the high quality of our modular solutions debunking preconceptions of modular housing. At full production, homes like this will be delivered repeatedly in a matter of weeks without the snagging issues faced by traditional methods.

“L&G has a long heritage in providing housing in the UK and sees modular construction as a natural evolution and extension of its position in this market. Modular construction is set to revolutionise the house building sector bringing new materials along with methods and processes used in industries, such as car-making to raise productivity and help to address the UK’s chronic shortfall of new homes.”

L&G has been involved in housing activities for nearly 20 years including: through its stake in CALA Homes; delivering a 1,000 home scheme in Crowthorne through its own house building arm, Legal & General Homes; and investing in a new institutional Build to Rent product. Legal & General more broadly is a significant investor in housing including social housing and student accommodation; and it is bringing housing back to the centre of the UK’s cities through large scale mixed-use urban regeneration schemes.

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Bovis inject £3.5m into fixing flawed homes following spate of complaints

Bovis Homes have announced that they are allocating a further £3.5m to address issues surrounding the build quality of their homes following a series of complaints from tenants.

The housebuilding giants announced in earlier this year that they would slow rate of production in order to focus more on ensuring the homes built are up to scratch.

Complaints soon made the headlines when customers began reporting multiple cases of newly built homes being handed over in an unfinished or unsatisfactory state in a bid to meet high sales targets.

The additional £3.5m will take overall budget for fixing legacy issues to to £10.5m.

In their FTSE 250 statement, the company commented “This further provision will ensure we are fully resourced to complete the works identified as swiftly as possible whilst at the same time delivering the appropriate high level of service to our new customers.

“We are confident that all legacy issues are now identified and that where possible these issues will be fully dealt with and the related costs incurred during this financial year.”

Group CEO, Greg Fitzgerald said the company’s performance in the first half of the financial year was in line with management expectations: “In the past 11 weeks I have spent a good amount of time with each of our operating regions, visited 85 sites and met the vast majority of our people.  We continue to identify and implement operational improvements and I am very confident we can deliver a successful turnaround, returning Bovis Homes to being a leading UK housebuilder.”

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Queen’s speech: industry reaction

There was much food for thought in the Queen’s speech, which took place today. Touching on key areas of our sector, on subjects such as housing skills, energy and infrastructure, the speech piqued the interest of construction professionals throughout. Buildingspecifier takes a look at what industry experts have to say in response:

Skills

The Government’s Immigration Bill must ensure that British business has access to sufficient levels of EU workers or major construction projects will grind to a halt, the Federation of Master Builders (FMB) has said in response to the Queen’s Speech.

Brian Berry, Chief Executive of the FMB, said “In terms of today’s Queen’s Speech and the focus of British business, all eyes are on the Immigration Bill. As suspected, we now know that the Bill will end the free movement of people but that begs the question: what will replace it? The Government has not set out what our post-Brexit immigration system will look like but it is crucial that key strategic industries, such as construction, are able to draw upon sufficient numbers of EU workers. EU tradespeople have come to play a crucial part in plugging the industry’s chronic skills gap and if the ability to employ non-UK workers is curtailed, the Government’s housing and infrastructure plans will be no more than a pipe dream.”

“Already, we’re starting to see a dramatic drop off in immigration from the kinds of countries that have typically supplied the construction sector with skilled talent. Statistics released today by Oxford University’s Migration Observatory show a 35% fall in the number of national insurance numbers being issued to nationals from the ‘EU8’ countries that joined the EU in 2004. A lack of certainty over what rights EU citizens will have in the country post-Brexit will undoubtedly be a factor behind this decline. Given the ongoing need to recruit from abroad, we need a clear message from the Government that non-UK skilled workers are welcome now, and will be welcome come what May.”

“The sector stands ready to work with MPs to shape the Immigration Bill into something that serves the economy and provides vital human resource to British business. The construction industry is also ready to significantly upscale the training and recruitment of UK construction workers so we welcome the recommitment to a proper industrial strategy and high skilled learning. In the longer term, being able to train more of our own workforce is without question part of the solution to our enduring skills deficit. Nevertheless, the Government must be pragmatic and introduce an immigration flexible system that allows skilled EU nationals to work in the UK with relative ease.”

Energy

Responding to the Queen’s Speech, RenewableUK’s Executive Director Emma Pinchbeck said “We welcome the Government’s commitment to a new modern Industrial Strategy. Wind, wave and tidal energy are new industries which are already creating highly-skilled, high-paid jobs, exporting around the world. Renewables can and should be the engine room of the Government’s flagship Industrial Strategy, driving our low-carbon economy.

“The need to reduce energy bills for consumers was also rightly highlighted in the Queen’s Speech. Renewable energy technologies are making record-breaking cost reductions, and clean energy tariffs are now competing with traditional low-cost tariffs to provide consumers with lower bills – we should continue this trend.

“It was important that the Government reaffirmed its strong support for action on climate change, including the implementation of the Paris Agreement. President Trump’s decision to turn his back on this has been greeted with bafflement and incomprehension in the US energy sector, as the global renewable energy market is worth $290 billion a year. The UK Government is showing leadership on energy policy and environmental issues which matter to the majority of the British public”.

Housing

Responding to today’s Queen’s Speech, Chartered Institute of Housing chief executive Terrie Alafat CBE said “We need an ambitious, long-term plan to tackle our housing crisis so it is encouraging to hear the government’s commitment to get more homes built and to bring forward the measures outlined in its housing white paper.

“But it’s not just about building more homes, it’s about building more affordable homes for people on lower incomes. We believe more investment is urgently needed in genuinely affordable homes to rent. Figures released this week revealed that the number of homes for social rent built with government funding dropped by 51 per cent in 2016/17. One of the new government’s priorities should be rebalancing the housing budget – affordable housing currently accounts for just 16 per cent of total direct investment.”

She added “CIH has been calling for a ban on letting agent fees so it’s good to see draft legislation being brought forward to tackle this issue.”

Terrie Alafat said the continuing uncertainty over the future funding of supported housing risks undermining government moves to provide appropriate services for our ageing population. She said “We are still waiting for the consultation on the government’s proposal to extend the Local Housing Allowance cap to supported housing, which is designed for people who need extra support, such as older people or people with a mental or physical disability. It’s absolutely vital that the government moves quickly on this issue. Supported housing schemes provide homes for some of the most vulnerable people in our society, and our ageing population means that demand is only increasing. We know that many supported housing providers will have put sites on hold while we wait for a decision on future funding and continuing uncertainty could be very damaging.”

Infrastructure

Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction comments “This is a critical investment that will enable Britain to build the infrastructure needed to rebalance our country’s economic wealth.

“Today’s announcement connects more of our major cities to a high speed rail network, and takes us a step closer to creating a Northern Powerhouse.

“The commitment recognises the dismal state of links between the heart of the UK and its Northern cities today. This should finally turn the tide and help the North regain its historic prominence in the UK economy.

“Government, local political and business leaders now need to come together and develop the connectivity that HS2 offers into an overall vision for the development of the North.
“The objective is clear – a vibrant, successful and integrated northern economy that our children will be proud to inherit. Today’s announcement brings us an important step closer to that.”

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Welsh government and home builders sign pact to boost housing supply

Communities and Children Secretary Carl Sargeant today launched a pact with the Home Builders Federation and the Federation of Master Builders to help boost the supply of market housing in Wales.

The Cabinet Secretary sealed the agreement on a visit to Edenstone Homes, a housing developer building homes across South Wales and South West England, in Magor, along with representatives of both organisations.

The aim of the pact is to set out a number of commitments for all parties that would help deliver against housing targets. It builds on the House Builders’ Engagement Programme which was established by the Welsh Government and the Home Builders Federation in 2014. The Federation of Master Builders has been invited to join the partnership to represent those building on a smaller scale.

Launching the pact, Carl Sargeant said “While recent figures published show that the numbers of new homes started and completed in Wales last year were at their second highest level since the start of the recession in 2007-8, there is still an acute need for more homes across Wales. As the Cabinet Secretary with responsibility for Housing, I have made clear, my commitment to increasing housing supply.

“This pact, developed in partnership with the Home Builders Federation, the Federation of Master Builders and their members, will help deliver on our commitment to increase housing supply. It signals a positive step forward, and reflects our strong relationship with the house builders, which is vitally important to ensure the successful delivery of market and affordable housing across Wales.

“I look forward to continue working them to ensure the people of Wales are provided with the homes they need.”

Stewart Basely, executive chairman of HBF said “The Pact provides a framework for housebuildersto work with the Welsh Government to develop policies that will allow desperately needed homes to be delivered. Together we need to create an environment that allows the industry to invest in the land, people and supply chains required to increase output to meet the acute demand for housing.”

Ifan Glyn, Director FMB Cymru said “Although in-roads have been made of late, a lot of work needs to be done if we are to build the numbers of homes required to meet demand. This pact brings together the main players that need to work closely if we are to achieve this objective.

“Federation of Master Builders members are all small local firms, once the main drivers of house building here in Wales. Over a number of decades they have increasingly become mere marginal players in the market which has hampered the capacity of the industry to deliver the homes we need. We hope this pact acts as a catalyst to reverse this trend. We look forward to working in a progressive, innovative, and positive way with ourpartners to make this happen.”

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Watch out for asbestos when tackling the housing crisis

As the drive to build more new homes in Britain gathers pace, the UK Asbestos Training Association (UKATA) has launched two new courses in April aimed at those developing the brownfield sites that will play a significant role in solving the housing crisis: Asbestos in Soils Awareness and Asbestos in Soils.

The UK is short of housing and with three million new homes needed by 2030, Prime Minister Theresa May has targeted building a million homes by 2020. Greenfield building is mired in controversy, so the key will be brownfield redevelopment and asbestos in soils training will be an essential requirement.

“A million homes is a tall order and those tasked with the development of sites with former industrial use are going to need awareness of asbestos in soils, which these major new courses aim to address,” said UKATA General Manager Craig Evans. “Architects and other such professionals may require the more developed course, but the core syllabus of each will be of great use to all involved in brownfield projects.”

The white paper, Fixing our broken housing market published on 7 February set out government plans to boost new home supply and received a mixed response. Despite calls to give the greenlight to greenbelt building, Communities Secretary Sajid Javid confirmed restrictions on greenbelt building would remain; leaving brownfield central to government plans – and that is going to need specialist training.

Training courses

Asbestos in Soils Awareness is for those working on brownfield sites. The course will assist employers in meeting legal obligations; highlighting how to avoid risks from Asbestos Containing Materials (ACMs) in soil: in both planned work and emergencies. Providing the theoretical skills to undertake work on sites with ACMs; Asbestos in Soils delivers an understanding of actions that must be taken in the event notifiable and/or non-notifiable ACMs are identified and explains the emergency procedures to be implemented in the event of on-site ACM in soils.

“Developers claim brownfield alone can’t solve the housing crisis, but the government position means asbestos in soils courses are a necessity,” added Craig. “Personnel need asbestos in soils awareness to undertake their roles safely, coupled with an understanding of the key asbestos regulations and how they fit the broader context of health and safety legislation.

Those successfully completing these courses will have awareness of the nature and properties of asbestos in soils, its effects on health and know how to avoid the risks from soils and made ground containing ACMs and how to work and stay safe.”

Anyone interested in the new course should contact UKATA direct for a list of training providers.

Tasked by the HSE in 2008 for taking-on, managing and developing the list of training providers for licensed asbestos work in the UK, UKATA is now the leading authority in all levels of asbestos training in the UK. For further information on UKATA, visit www.ukata.org.uk.

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Strong start for construction in 2017 as housebuilding flourishes

The construction industry has started 2017 strongly, with an increase in activity levels as the value of new building contracts awarded in January reached £6 billion, spearheaded by strong figures from the housebuilding sector.

According to the latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, housing figures increased sharply across January, with construction contract value reaching £2.7 billion, a massive 83 per cent increase compared with January 2016.

Housebuilding

Of all the type of projects across housebuilding, it was private housing that dominated in January, with 91 per cent of the total construction contract value in January, compared to just 66 per cent a year ago. Market conditions for private housing were also favourable for housebuilders in 2016, with Crest Nicholson recently reporting a 27 per cent increase in full year profits.
There are also currently £5.8 billion worth of housebuilding contracts that are nearing award status, suggesting this month’s growth is likely to continue over the next few months and beyond.

London unsurprisingly led all regions based on total construction contract value in January, accounting for 26 per cent. This was helped greatly by the £900 million One Nine Elms Twin Towers development, the largest project recorded on the month.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Whilst the housebuilding sector is performing admirably, we expect to see its growth continue to flourish across 2017. However, other sectors now need to start producing more auspicious figures, such as the commercial & retail sector, which saw a year-on-year decrease of 40 per cent last month. Infrastructure, another traditionally big performing sector, is also in a slump with January figures being the lowest for 12 months.”

“On the positive side, the number of projects awarded in January jumped by 50 per cent compared with December and 25 per cent when looking at January last year. These figures are encouraging and would suggest that work is most certainly on the way.”

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VIDEO: Quintain’s plans for Wembley

With funding and planning secured, construction at Wembley Park will be at a pace not seen at any other major development site, with 5,000 homes under construction over the next 7 years.

Wembley Park will be the largest single-site purpose built PRS (private rental sector) development anywhere in the UK after Quintain announced its intention to deliver the remaining private homes at Wembley Park as build to rent. 5,000 homes for rent will be available at Wembley Park, all under Quintain’s ownership, and will be delivered in phases over the next seven years.

By the end of 2017, there will be 3,000 homes under construction, alongside a new seven acre public park, a new landscaped London square, a three-form entry primary school and a wide range of shops, restaurants and workspaces to complement the existing Wembley Park shopping and entertainment offering. Quintain’s next Tipi apartment building will be available for occupation this summer.

Quintain has already invested £900 million in the transformation of Wembley Park and has a further £800 million of funding secured, with planning permission in place. It is expected that on completion, Wembley Park will have created over 8,500 permanent new jobs across a range of sectors, in addition to the jobs created during construction.

Angus Dodd, Chief Executive of Quintain, said “Our commitment to build to rent at Wembley Park means we can deliver the homes London needs far faster than if we were selling homes privately and ensures they will be occupied very shortly after they are complete.

“This long term commitment also means we can design homes specifically for the needs of today’s generation of renters and provide fantastic shared facilities and professional management arrangements which our residents love. We will ensure no apartment is left empty.”

Sadiq Khan, Mayor of London, added “This development will provide 5,000 much-needed private rented homes for Londoners. It will take time to fix the housing crisis, but at City Hall we are committed to help deliver schemes like this that will increase the supply of homes across the capital.”

Build-to-rent can help fix ‘broken housing industry’

A new report, produced by the British Property Federation (BPF) and Savills in conjunction with the London School of Economics, proposes that the purpose-built rental sector could deliver as many as 240,000 new homes by 2030.

If, for example, just one fifth of the large residential sites currently being built on incorporated build-to-rent, it could increase annual home delivery by 6%. Put into context, this is around 10,000 new homes a year relative to the 164,000 new homes completed in England in 2015/16.

In conjunction with the supply already set for delivery over the next three years, it would take total build-to-rent output to 15,000 new units a year, and to 240,000 over the next 13 years.

Ian Fletcher, Director of Policy at BPF, explained “By measuring build-to-rent’s growth and the other benefits it delivers, and what gets in its way, we want to show to government the sector can be an important partner to its ambitions to build more homes.”

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Offsite construction expected to feature in Housing White Paper

Communities Secretary Sajid Javid will set out the details of the housing White Paper in a statement to MPs today. The Minister admitted that the current market is “broken” and if we are to fix it we need to consider modern methods of construction such as offsite and modular.

Javid’s speech intends to highlight the need for more homes (at least 250,000 new homes each year) as a matter of priority. Over the weekend Housing Minister Gavin Barwell admitted that the government were currently behind schedule on its goal of building one million new homes in England by 2020.

When unveiling the paper, Javid will say: “Walk down your local high street today and there’s one sight you’re almost certain to see. Young people, faces pressed against the estate agent’s window, trying and failing to find a home they can afford.

“With prices continuing to skyrocket, if we don’t act now, a whole generation could be left behind. We need to do better, and that means tackling the failures at every point in the system.

“The housing market in this country is broken and the solution means building many more houses in the places that people want to live.”

In an interview with BBC Radio 4, the Communities Secretary also indicated the need for a shift in focus on increasing home ownership, an ambition of most post-war Conservative governments. He said “It is a false choice. The reality is we need more homes, whether to rent or buy.”

The White Paper is expected to contain the following measures for meeting demand:

  • A £3bn fund will allow housing associations and councils to fully utilise the skills and facilities of smaller building firms, including support for modern methods of construction, such as modular and offsite
  • Councils will be required to provide the government with an up-to-date plan for housing demand
  • The delivery time for housing will reduced from three to two years between planning permission being submitted and construction works beginning
  • Green Belt is expected to be protected, only to be built on in exceptional circumstances
More on this following the release of the paper later today.
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