Gove sounds alarm over homes target
Levelling Up Secretary Michael Gove warned this week that the Government’s housing target of 300,000 new homes per year may not be achievable – but stated that it would do “everything it can” to meet this volume.
Speaking at the Levelling Up, Housing and Communities Select Committee, Gove confirmed that the target remained in place, but warned: “Will we meet it? We’ll do everything we can. But there are a number of factors that have made it more difficult.”
He added that the industry had achieved 244,000 completions before the pandemic – but said that there were now “a number of economic headwinds that have made life more difficult.”
Overall construction output slips amidst need for 250,000 new workers
The latest official figures from the Office for National Statistics have revealed that construction output slipped by 0.4% in April, marking the first decline since October.
Driven by falls in private housing repair and maintenance, and private commercial new work, the figures actually revealed an increase in housebuilding of 1.1%, after previously dropping for two consecutive months.
Also this week, cost consultant Arcadis warned that soaring material inflation and risk allowances in tenders could increase cost inflation to 10% this year.
Their latest Market View estimates that disruption caused by the war in Ukraine has magnified existing supply chain problems and increased tender prices by 3% to 5%.
Meanwhile, whilst construction vacancies reduced by 4% in May – according to data by the Office for National Statistics – they remain at historically high levels.
The current figure of 46,000 vacancies has only been surpassed three times in the past 21 years, with all of these occurring in the last ten months.
And, according to the Construction Skills Network, the industry needs another 266,000 new workers by 2026 to meet growing demand.
At a time when labour levels are historically low, and the sector continues to suffer from a skills shortage, developing a competent and highly-skilled workforce will be the biggest challenge contractors will face over the next five years.
The largest increases in demand are expected to be seen in carpenters and joiners, along with construction managers, technical roles and office staff.
Developers post mixed results
Scottish housebuilder Miller Homes has reported a huge rise in profits and turnover in the first annual figures since its takeover by Apollo at the start of the year, reporting revenue topping £1bn and pre-tax profit rising by 142%.
Bellway also experienced similar fortunes, seeing their order book rising by 27% as they told the stock market that they expected to increase completions by 10% this year.
However, the cost of building remediation has seen Crest Nicholson post a half-year pre-tax loss of £52.5m, although the firm did report that it expected full-year profit to increase from £135m to £140m.
Meanwhile, Countryside Partnerships has revealed that it is open to offers, following pressure from shareholders. The business had recently rejected two offers from US-based hedge fund Inclusive Capital Partners.