As a result of the Budget we now have a target that by 2025 we will be building 300,000 new homes in England every year. To put that into context, we have not managed to build more than 250,000 new homes in a year since 1978.
At that time local authorities built 44% of those homes. We were also not facing the prospect of acute skills shortages, nor the labour market uncertainties that will flow from Brexit. So, there are two inescapable questions: who is going to build all these houses, and how?
The Home Building Fund and measures to release land locked for development will certainly help. But they won’t provide the bridge between the house building capacity we have and the one that we need.
Can We Build Faster?
Stepping up to the challenge would be less daunting if productivity growth in construction had kept pace with the rest of the economy. Output per worker across the whole UK economy has increased by around 45% since 1978; in construction it has been pretty much flat. In manufacturing, for example, productivity has increased by over 60% since 1994.
Why the difference? In 1978 in most sectors people were doing different jobs, using different tools and performing different tasks. Many of those jobs no longer exist. But on the average construction site not much has changed. As we don’t have a limitless supply of skilled labour it’s hard to see how traditional builders will build the homes required, even if the Chancellor succeeds in opening up the housebuilding market.
The Realistic Option
Greater use of offsite construction isn’t just an option, it’s the only realistic option. The Chancellor clearly gets this; it’s why there is a coming presumption in favour of offsite for publicly funded building programmes.
With panelised offsite construction, structures are created using modern manufacturing facilities. These achieve excellent levels of productivity and precision and allow for greater standardisation of the product. There are fewer skilled people needed on site as the building structure, including floors and roofs, is pre-manufactured and erected by small specialist teams in a short space of time.
Production can be stepped up without having to worry about where we will find large numbers of skilled bricklayers, carpenters, plasterers, roofers and so on.
We can get back to, and exceed, the house building rates that we last saw in the 70’s – but only if we stop trying to build homes in the same ways that we did back then.
