In light of the government's announcement to build 1.5m new homes, we asked Michael Parinchy, a manager at Probuild360, to outline the challenges facing SME house builders and to discuss what government action is required to meet the target.
I am a senior construction manager with Probuild360, a family-run, small-to-medium volume, high-quality construction company. We carry out projects ranging from domestic extension, renovation, and refurbishments to significant property development projects (10-30 houses/apartments per site) as well as some high-end, design-led commercial establishments.
About Probuild360
The objective of Probuild360 is to raise the bar for the industry and to establish us as thought leaders in quality, design and innovation, while maintaining an appropriate balance between traditional and modern building methods and processes. Part of the pursuit of that objective has been to integrate into the company a commercially productive relationship with universities. With BCU we have given birth to 2 exciting Knowledge Transfer Partnerships – achieving things together that are greater than the sum of our parts.
The Chairman of the National Federation of Builders, Mark Wakeford, recently said to me in conversation that the UK construction industry is both struggling with issues and is very exciting and healthy at the same time. I think this is a fair and balanced diagnosis. It is worthwhile taking stock and auditing both sides of this coin.
The negatives
The planning system needs radical reform as construction SMEs are at breaking point, particularly housebuilders (in the late 1980’s SMEs built around 39%-40% of all new homes in the UK… now that figure is around 7%-8%). Our commercial viability is being impacted by all manner of levies, taxes, and other financial contributions, imposed on anyone applying for planning permission. Convoluted, poorly framed planning policies makes matters worse.
Land allocation needs to be parcelled up into smaller sites otherwise only the big national housebuilders will be viable. Planning department case officers are too beholden to NIMBY councils. Planning application fees are up while local authorities have been sitting on an estimated £8bn in infrastructure funds for years. Developers are stuck in the planning system on average for 18 months – far too long. Not enough young people are going into the construction industry to sustain it over the next 20 years. In the meantime, the domestic market has too many rogue builders and needs to be better regulated.
The positives
Despite these challenges the industry continues to innovate, has many high calibre professionals working in it and provides lots of opportunities for those wishing to enter the profession. Advancements in materials, processes, digital systems and Knowledge Transfer Partnerships with universities like BCU are transforming the construction industry. A focus on environmental improvements has resulted in the creation of truly energy efficient homes achieved through improved construction techniques and exciting new energy systems. The Centre for Future Homes and Project 80 are two good examples of the industry designing its own future and showcase what can be achieved.
The welcome announcement of 1.5m new homes by the government has been portrayed by some commentators as pie in the sky but I know what the industry is capable of. But without SME housebuilders that number in terms of quality, quantity, and variety simply won’t be achieved. The best SME housebuilders in the country want to lead when it comes to tackling the supply of new homes. That means revising the planning policy frameworks, prioritising SME commercial viability and making sure local authority planning departments administer planning applications in a timely manner.
The need for change
As Chairman of the House Builders Association, I’m lucky enough to interview many industry leaders for our podcast. From these conversations I know that the spirit of the industry remains unbroken. The Birmingham city skyline with its cranes and building projects is testimony to an industry transforming the city. But if the true potential of the built environment is to be achieved the political, legal, regulatory and cultural landscape must become more accommodating towards our activities. If this new government can do that, the future of the built environment will be very bright.
BCU runs the Centre for Future Homes and has an experienced knowledge transfer team who can assist your business with strategic change.
The views expressed in this blog are those of Probuild360, not BCU.