The company is reporting enough demand to double its mortgage lending to self builders and boost the flagging construction sector with thousands of new jobs, saving the state tens of millions of pounds in benefit payments.
The potential for larger scale self build is significant, says BuildStore, and its enquiry levels in 2009 demonstrate that there is a growing demand from frustrated homeowners. BuildStore normally arranges around £500 million in self build mortgages every year, but is appealing to lenders, including state-funded banks and local building societies, for more funds to meet the demand and boost the construction industry, supporting local labour supply and skill bases, and providing investment in local communities.
Raymond Connor, Chief Executive of BuildStore comments: “It is a critical time for the housing market, and we believe that self build housing can play a big role in kick-starting activity, by providing new homes and new jobs. BuildStore believes that the social and economic benefits of self building are too significant to ignore, and is therefore urging lenders to make an allowance, however small, for the self build mortgage market.
“State-funded banks now have an obligation to put money back into the economy and local building societies could be doing more to support their local communities. Further investment in self build lending will help solve the housing shortage and can help to bring skilled tradesmen off the dole and provide real investment for local communities.”
Self build has proved resilient during the credit crunch, with a panel of lenders still providing up to 95% funding for land and build costs through BuildStore and facilities like the National Self Build & Renovation Centre in Swindon providing information and education to give people the confidence to tackle their own home-building projects.
The stagnant property market and shortage of new homes is now beginning to take its toll and homeowners who need to secure their position on the property ladder are looking for alternatives.
The self build market has outgrown its ‘alternative lifestyle’ label, and with a raft of professional services, experts and support, modern day self build has an established independent marketplace, making it far more accessible and the rewards even more appealing, although it remains relatively under-represented, as compared with other nations.
At a time when housebuilding output is at its lowest for decades, mortgage lending is restricted, and thousands of construction workers join the dole queue, self build could become a real alterative to delivering the UK’s housing needs, providing quality homes, supporting the troubled construction sector and local workforces.
Construction Dole Queue
The recession has put the construction industry under immense pressure, leading to tens of thousands of job losses, and the lowest level of housebuilding in decades, creating a shortage of new homes and an ever-increasing dole queue.
The UK construction industry employs 1.29 million people, but over the last year, the rate of construction job redundancies was higher than any other sector, including the banking & financial sector. Most of these job losses have been in the housebuilding sector, which accounts for almost 40% of the overall construction output in the UK.
Figures published by the Office of National Statistics last month reveal that construction workers are at the top of the list of out-of-work dole claimants, costing the Government nearly £4million each week. Construction trades, such as carpentry, bricklaying and plastering have all recorded over 100% increases in workers claiming dole payments in December 2008, compared to December 2007, with 78,540 more tradesmen joining the dole queue at the end of last year.
BuildStore believes that there has never been a better environment for self build and as the construction industry has been hit hard by the recession, the opportunity to safeguard skilled construction trades and provide better quality housing is there for the taking. With the current annual output at 20,000, the self build market provides 28,453 full-time construction jobs, with a total spend on construction labour and professionals of £1.19bn each year.
Construction labour & professionals required for each self build project:
Trade - Total days per project
Architect 20 - Structural Engineer 1 - Groundworker 90 - Bricklayers 30 - Roofer 20 - Electrician 15 - Plumber 15 - Plasterer 30 - Carpenter 60 - Decorator 30 - Tiler 10 - Total 321 days
By enabling an extra 5,000 self builds each year, 7,113 full-time construction jobs are created, representing an additional £298million spend on labour.
Mr Connor concludes: “The Government’s target to build three million new homes by 2020 is under threat, but BuildStore believes that self build housing could make a significant contribution to this target – we have the demand from self builders, the availability of land and labour, and the access to funding to make it happen. We can also safeguard thousands of jobs and keep skilled labour and local economies thriving, by enabling the delivery of more homes using the self build model.”
