There’s no escape, I’m afraid, from Brexit and its related issues.
Tony Ward is chief executive of Clayton Euro Risk
There’s no escape, I’m afraid, from Brexit and its related issues.
Topic for this week is the potential impact of a hard Brexit on the housing market.
Crest Nicholson’s chief executive Stephen Stone urged the government to treat EU migrants working in the construction as ‘skilled workers’ once Brexit negotiations get under way.
According to Mr Stone, workers from eastern Europe constitute 70% of the builder’s workforce. Even in cities such as Cambridge and Bristol, Eastern European labourers represent an average 30%–50% of workers. “Our argument to the government,” he said, “is please don’t classify these workers as unskilled; they are skilled.
Generally, they are young men; they are fit and healthy; they are not a drain on education and health and are contributing, so if the government wants to increase output, we need to recognise that.”
Agreed. On the topic of Brexit, recent government comments suggest ministers are keen to have their cake and eat it.
In relation to housebuilding, the proposed curbs on immigration would cut deep – especially when it is the government setting the target of building 1 million homes by 2020, which does not seem an achievable or realistic objective given current circumstance.
It’s true to say that housebuilders have faced a skills shortage in recent years.
Yet as a nation, we’re failing to address this issue, in part by encouraging home-grown talent to pick up their trowels and cement mixers.
Droves of skilled tradesmen, such as bricklayers, have not returned to the trade after being laid off during the recession, while fewer young people are entering construction.
Karl Whiteman, Berkeley’s executive director, concurs.
He cited the skill shortage as one of the biggest factors behind Berkeley’s recent move into modular housing.
Berkeley Group has started to make and sell houses built almost entirely in former factories.
Sixteen of its factory-built, pre-fabricated houses will be launched at a site called Kidbrooke Village, Greenwich, in South East London. Each room in these new properties has been assembled in the Midlands in steel-clad box frames, before being delivered by lorry to be stacked together on-site, shaving 19 weeks off the traditional method of building. Berkeley said it had another 50 modular homes in the pipeline and aimed to open its own dedicated factory soon.
Whiteman said: “One of the key drivers for us has been the pressures on the industry in terms of the supply chain, particularly around labour.”
He expanded: “For the last couple of decades, the industry hasn’t been training as it should have done and it is now at the point where it has to modernise if we are going to deliver the number of homes that are needed.
"We have not been training as a country sufficient labour, so we have got to find another capacity for the industry.”
Hardly surprising, then, that others are following suit.
Legal & General is building the biggest modular factory in the world in Sherburn-in-Elmet, North Yorkshire. It hopes that the factory will produce 3,000 homes a year.
Perhaps this is the way forward – but it won’t be the total solution to our housing building deficit.
I agree with Crest Nicholson’s comments. We should look to retain these key workers, whether they are UK based, from the EU or outside the EU.
I also think a sharper focus from the government is required, particularly on training apprentices.
On 23 January, we learned some initial details about the government’s industrial strategy but the content was modest and, while in included headline statements about increasing public spending on research and development, it held scant comfort for the housing market.
I know I’ve said this before but what we need are specific government-backed initiatives to support apprentices coming into the industry or we are never going to get within spitting distance of our housebuilding targets.
I called for this back in February 2016 and so far, I’ve been disappointed that little is happening nationally.
My prediction that demand for housing in this county will outstrip supply for many years to come remains likely unless these skills shortages in construction are addressed.
Let’s hope we see something in the government’s highly anticipated housing white paper due shortly.
