Broker account manager believes vital package is missing
When Labour swept to power in July, hopes were high that the incoming government would deliver on its pledge to build 1.5 million houses, and certainly Rachel Reeves has made a £5 billion Budget commitment to deliver on its plan.
But Gary Clarke (pictured), new build account manager at broker firm The Mortgage Store, suggests that the Chancellor has done nothing to address a skills shortage in the building sector, and this could hamper the government’s home-building ambitions.
Clarke believes the government needs to invest in training the next generation of skilled builders if it is to successfully overcome the country’s housing crisis.
Reeves’ Budget announcement included increasing investment in the UK’s Affordable Homes Programme to £3.1bn, renovating sites across the country, with 2,000 new homes. Right to Buy discounts will be reduced, she declared, and local authorities will be able to retain the full receipts from any sale of social housing, to be reinvested back into housing stock.
These measures to tackle a dearth of housing in the UK could be compromised though by a lack of skilled people coming up through the ranks of the building industry, suggests Clarke.
“It was good to see the £5 billion package announced for boosting for housing, especially for SME housebuilders,” he told Mortgage Introducer, “but there still remains a skill shortage in the building sector and not much offered in the way of a solution.”
He continued: “Forty-six million pounds of funding to train 300 planners is great, to help planning, but where is the package to address the skills shortage in the building sector? The average age of a bricklayer in the UK is 55, we need the next generation coming through to replace them.”
How many new properties are built in the UK?
Some 38,400 new properties were completed in the UK in Q1 2024, according to the Office for National Statistics. This was down by 14.8% from the same period a year before, and down by 24.9% on the previous quarter. The National Federation of Builders believes the government faces ‘a considerable challenge, particularly with workforce capacity’, if the equivalent of 300,000 homes are to be built per year.
Clarke noted that rumours persist of a new scheme to replace Help to Buy later into this Parliament, though he is not convinced that this is the best way forward – and unless supply is addressed, he believes, such an initiative could back fire.
“I am not sure that would be the right decision, but it is undeniable that the clamour exists, and it would be welcomed with open arms in some quarters,” he said. “Personally, I think it shows a lack of imagination and ultimately, unless the housebuilding targets are met; increasing demand, without meeting it with supply, will just push prices further up and take home-ownership further out of reach for more people.”
READ MORE: Should Labour bring back Help to Buy?
What will a Stamp Duty increase mean for current property deals?
An increase in Stamp Duty for second-homes by two percentage points to 5%, was also not supported by Clarke.
“The uplift to Stamp duty for additional properties was a little unwelcome, especially the lack of notice – that’ll likely lead to a few cancellations, but not an overwhelming number,” he observed.
Reform of Stamp Duty, which had been the subject of speculation, hasn’t materialised yet – Clarke believes this may happen later into Labour’s term in office. Markets have largely not been spooked by the party’s first Budget in 14 years, featuring £40bn of tax rises, he said.
“Most of what was announced had already been priced in, “ Clarke explained. “We will see over the coming weeks and months what will happen, with the chance of a base rate cut next drifting from a 93% chance, to an 84% chance, it still seems very likely that will happen, which would be a smart move as this would likely boost consumer confidence.”
In Clarke’s view, the budget isn’t as bad as it might have been, though it didn’t really offer much in the way of positivity.
“With a new government potentially having up to five budgets to deliver, this was always likely to be the worst one,” he said, “get the worst of it out of the way now, paving the way for what will hopefully be more positive budgets in the future.”
