How the UK building industry is bridging the skills gap
Stewart Baseley, Executive Chairman of the Home Builders Federation (HBF) discusses the last 12 months for developers.
What did you learn from 2015 and how will that help developers in 2016?
Whilst the election caused some uncertainty in 2015, the wider environment within which the industry is operating is a positive one. Successive governments have unveiled pro development polices, recognition at last that we now face an acute housing crisis – and the industry has responded.
“Last year saw 181,000 new homes being built, the highest level since 2008/9 and a year on year increase of over 20%“
The industry, and its ability to build enough of the high quality new homes the country needs is dependent upon a stable policy and economic environment. However, all the indicators that we measure, in terms of the number of planning permissions granted, registrations and new home starts suggest that further increases in supply will be maintained moving forward.
How realistic is home ownership for those not on the property ladder?
The short answer is: increasingly more realistic.
The Help to Buy Equity Loan scheme has taken huge strides in helping to unlock demand for new homes. To date, the scheme has helped 62.5k purchasers (with an estimated 10-15k in the pipeline); 81% of purchases made through the scheme were by first time buyers, and the average purchase price was £217k. Importantly, 94% of new homes bought with the aid of Help to Buy Equity Loan were outside of London, and 79% of completions had household incomes below £60k.
The Help to Buy Mortgage Guarantee scheme has also helped to galvanise the wider market, though it is more difficult to estimate impact on new build but 65,920 buyers have been helped since its launch, with an average purchase price of £155k for those helped. 79% of those using the scheme were first time buyers but it has also helped others in ‘chains’ to help move the market.
The launch of the Starter Homes scheme will also hopefully help first time buyers further, but details on exactly how the scheme will work are still yet to be resolved.
We’re moving in the right direction and the market is certainly more accessible for first time buyers than it has been for many years.
What is the legacy of the Help to Buy Equity Loan scheme?
Given that last year the government announced it was extending the scheme until 2021, we won’t know the full extent of Help to Buy’s legacy until after it’s completed. However, it is quite clear that it has played a significant part in the increase in build rates we have seen. Prior to its introduction, following the wider financial crash of 07/08 people, especially first time buyers, were struggling to save the deposit required to secure a mortgage. As a result demand for new homes dropped dramatically and if people can’t buy, builders can’t build. The equity loan scheme, which enables people to buy a new build homes with just a 5% deposit, thus increased demand and allowed builders to get building again.
The figures speak for themselves: over 62k people helped into a new home; over 80% of purchases were made by first time buyers; and 94% of purchases were made outside of London. The scheme has clearly targeted the people that need the most help taking the extra step to buy a new home, and with the Starter Homes scheme coming later this year, the breadth of people getting assistance should increase significantly.
How is the house building industry responding to the skills crisis?
The industry is a huge employer both directly and indirectly and the more homes the industry builds, the more jobs we create. The industry is recruiting heavily from graduates and apprentices to experienced workers – we estimate that the huge rise in housebuilding levels created an additional 100,000 jobs last year.
However if we are to maintain increases in build rates and continue to provide more, high quality homes, to we need to be recruiting and training tens of thousands more people. To that end, we need to attract the best people to start their careers in house building.
Recognising this, the industry has launched a brand new website www.Housebuildingcareers.org.uk which aims to raise awareness amongst young people of the variety of careers you can have in house building. We have also worked closely with CITB on their www.goconstruct.org.uk to develop its house building ‘offer’.
We are working with CITB more generally on schemes to attract and train experienced workers, on training for the industry’s non-construction related workers and a range of other initiatives to bring more people into our industry.
For example, house builders have long recognised the large amount of relevant skills that ex-military personnel have already gained, and in many cases joining the industry is a natural step for those no longer wanting a career in the military. House builders have now begun to formalise that process, with a number of companies now actively recruiting from the military and offering tailored training. We’re working hard to promote house building as a career of choice of military-leavers and will continue to do so into 2016.
The skills crisis saw a large number of employees leave the house building industry, and now we are encouraging those people to come back. For experienced workers, HBF launched the experienced workers portal, with support from CITB, as a standalone scheme to help get people with relevant experience into training and then to help them find jobs.
