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Residential capacity: Tipping point or teetering over the edge?

by Harry Curtis

With the housing and planning bill under debate in the House of Lords, the

timing couldn’t have been better for the ULI to host the ‘Residential Delivery

Capacity in the UK’ seminar on the 26th April. Close to 100 people flocked to

the Royal Geographical Society to discuss how we can match our housing

ambitions and bring targets into reality.

Vice-chair of the ULI UK Residential Council and chief executive of Cast,

Mark Farmer kicked off the day by setting out the challenge facing the

housebuilding sector: an ageing workforce, low productivity, and out-of- date

working methods.

Farmer believes that “we find ourselves at a tipping point”, with three times as

many people leaving the workforce a year than joining it. Few young people

wanting to take up construction means that in 10 years’ time, 20 per cent of all

workers will be aged between 55 and 64.

There’s also the challenge of low productivity, which, for construction has

flatlined in recent years. The Cast CEO made sure to remind the audience

that increased productivity won’t just come from “laying more bricks an hour,

but fundamentally changing the way we go about building homes, including a

greater use of offsite methods.”

Farmer concluded that, unless the construction sector changed its working

models, it was in real danger of being “unfit for purpose in a few years.”

Lucky, then, that the government has recognised this with Farmer conducting

a review into the skills shortage at the request of ministers, Brandon Lewis

and Nick Boles.

Simon Rawlinson, head of strategic research at Arcadis, the day’s sponsor,

was next to step up to the plate, bringing stacks of facts and figures showing

the gravity of the situation.

Rawlinson reckoned there were “no more than 300 unemployed bricklayers in

London and the South East at any one time.” This severe shortage in skilled

workers will shackle any attempts to boost housebuilding.

Backing up Farmer’s earlier comments, the Arcadis man went on tell the

audience that in one quarter in 2015, the industry lost 70,000 workers.

Co-authors of Arcadis’s People and Money report last year, Farmer and

Rawlinson were in unison on the benefits that offsite construction can bring

both in attracting more people to the sector and making the work itself less

labour-intensive.

Hot on their heels, housing and planning minister Brandon Lewis gave a

keynote speech, underlying the government’s ambitious housebuilding

targets. The minister praised industry players that are taking up the mantle of

offsite construction, like L&G, Laing O’Rourke and Essential Living for its

Creekside Wharf scheme in Greenwich. Lewis also thanked those who had

made his life easier by cutting the time it takes to build a home to weeks

rather than months!

With so much information packed into a half day, it might have been hard to

reach a clear conclusion, but thankfully Farmer stepped in to conduct a straw

poll at the end of the session. Only one or two of the audience members

believed that we’d build one million homes by 2020. But it wasn’t all negative

– the audience were unanimous in their support for offsite construction and

the opportunities that emerging asset classes, like build to rent, offer.

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