Published today, the second annual Lloyds Bank Commercial Banking report on the UK housebuilding sector found confidence was increasing. The report says average predicted growth over the next five years is 28%, up from the 25% predicted in last year’s survey. It also found that average five-year investment plans were increasing by 17% year-on-year.
Despite the positive outlook, 36% of firms said that the uncertainty following the EU referendum result is the biggest challenge to their business. Almost one third (30%) said there were not enough skilled workers in the industry and highlighted difficulties in recruiting bricklayers, electricians, plumbers and joiners.
Firms also said that the availability of government support (32%) and suitable land (29%) are factors that impacted the industry’s ability to meet targets for new housing. Indeed more than one fifth (22%) of housebuilders do not believe the sector has the resources it needs to help the government achieve its targets for new housing.
Pete Flockhart, head of housebuilders, commercial banking, Lloyds Bank, said: “Given the challenges that housebuilders face, the sector is painting a relatively optimistic picture, with improved growth and investment forecasts compared with last year’s survey.
“The wider uncertainty, coupled with the rising cost of materials, presents some challenges but the industry is taking steps to tackle these issues head on, and still plans to grow.”
Stephen Smith, director of Legal & General Housing Partnerships welcomed the report, but said he wanted to see the government overhaul its approach to housing.
“During the Prime Minister’s first 100 days in office, we have been promised a ‘radical’ approach to housing, so there is at least a political recognition of the need to build more affordable homes. However, we now need to see these pledges turn to action. As we move closer towards the next Autumn Statement, we hope to see the government starting to work more closely with the house building industry to ensure this annual target is met, or even exceeded.”
The report highlighted a number of issues also raised by the IPPR in another report released today that urged regional authorities to be given greater powers to influence house building strategy at a local level.