Just before the 2019 General Election, every main political party pledged to build more homes.
There was general agreement on the problems of under-supply – especially in England.
And while the underlying demand for new homes is adding resilience to the housing market in the face of a cost of living crisis and rising interest rates, there is still an almost universal acknowledgement that, throughout the UK, we need to build more homes.
Setting aside for one moment whether it is a good thing or a bad thing that everyone wants to own their home, the fact remains that it is an aspiration commonly held and passed on from generation to generation.
But we’ve fallen short – so short that housing has now reached crisis point and crept back up the political agenda where it is likely to remain until the next general election tipped to be in the Autumn of 2024.
So how many more homes are needed?
According to an estimate commissioned by the National Housing Federation and the housing charity, Crisis, from Heriot-Watt University, 340,000 new homes need to be supplied each year of which 145,000 should be affordable. But according to Government figures, around 233,000 new homes were supplied in 2021/22. And while they would argue there was less demolition and more change of use over that period, the fact remains that we continue to fall short.
Introduce reforms
The Government has identified the planning process as bearing at least some of the responsibility for the below par performance and its Levelling Up and Regeneration Bill currently going through Parliament seeks to introduce reforms designed to make the system more rules-based and predictable – something which may encourage developers to invest.
Home builders claim the other major barrier to development is a legal requirement by Natural England that new homes should not add nitrates or phosphates to nearby waterways. Developers need to prove their new-builds will be ‘nutrient neutral’ before sites close to rivers can be granted planning permission. It is estimated that 120,000 homes have been delayed across 74 local authority areas as a result. In April this year, the Government did announce some measures to help developers comply with the regulations but, despite this, the Home Builders Federation reported in June 2023 that the number of homes currently blocked stood at 145,000 and bans had spread to over a quarter of England’s local authority areas forcing smaller building firms to consider whether it was worth their while staying in the sector.
Despite the problems with the planning system and environmental restrictions, demand for new-build homes has never been higher – ironically, largely because they are more energy efficient and, therefore, cheaper to run.
So are there new ways to build new, eco-friendly homes quicker and more efficiently than the traditional ‘ground-up’ construction?
According to industry commentators, developers are constantly looking to adopt processes and technologies to accelerate the process.
Modular homes are one example. These ‘flat-pack’ houses are built off-site, shipped to the new location and then put together.
According to a Savills Impact Report, homes built using modern methods of construction (MMC), are likely to increase substantially over the next 10 years to as much as 20%.
The report cited the reasons why developers were likely to increase their use of MMC as shortage of supply, regulatory intervention and the need to reduce environmental intervention.
On-site skills
One UK modular construction company, Enevate, recently announced a 118% increase in turnover to £8.5 million.
Possible labour shortages are another reason why developers might consider MMC for new homes construction. Shortages of skilled workers have been experienced since Brexit, and modular homes reduce the need for on-site labour.
And Artificial Intelligence, very much in the news recently, has proved its use in the construction sector as well as everywhere else.
Practitioners have found it particularly helpful in areas like site health and safety, planning procedures, project management and design.
Many traditional onsite skills, like bricklaying, can be performed by automated machinery so the industry does look to embrace technological advances where possible.
If UK is going to solve the housing crisis, it’s going to need help and innovation.