Research calls for “significant step up in delivery”
Research by real estate services provider Savills has found that around 187,000 additional affordable homes need to be built in England each year.
The report, Beyond a one size fits all housing policy, calls for a “significant step up in delivery” of social rented homes, with a current annual affordable housing shortfall of 128,000 homes a year.
The greatest need for affordable housing is in the south of England, where an additional 62,600 homes are needed each year.
Affordable homes of all tenures are required if we are to build the homes people need and solve the housing crisis. This is important to consider as the government creates a new housing strategy for England from Spring 2025.
Steve Partridge, Head of Affordable Housing Consultancy, Savills
House prices increase for fourth consecutive month
Halifax has published its house price index for October, revealing a monthly increase of 0.2% in the average property value – a fourth consecutive monthly increase.
A typical UK home now costs £293,999, surpassing the previous peak set in June 2022 (£293,507).
Annual house prices are up 3.9%, a slight easing from 4.6% in September.
Amanda Bryden, Head of Mortgages for Halifax, said: “While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next.”
Surveyors remain optimistic, but SMEs report falling workloads
The latest UK Construction Monitor for Q3 2024 by the Royal Institution of Chartered Surveyors (RICS) has found a high level of optimism amongst survey respondents, with a net balance of +28% of participants predicting an increase in workload over the next year.
There is a “notable rise in confidence” in the private residential sector, with +26% of respondents predicting growth, an improvement from the +12% average reported over the past four quarters.
While growth prospects for the next twelve months appear to be brightening, challenges persist, particularly around tight profit margins across the industry and ongoing skills shortages.
Industry professionals anticipate an improvement in credit conditions over the year ahead, which should provide a much-needed boost to industry confidence.
Tarrant Parsons, Senior Economist, RICS
However, the latest quarterly State of Trade survey from the Federation of Master Builders (FMB) has revealed that only 27% of members saw their workload increase between the second and third quarter of this year, whilst 32% reported a decline in workload and 23% reported a decrease in the number of employees.
The government missed a key opportunity in the October budget to announce serious funding to tackle the skills crisis in Britain while tax rises, such as the increase to employers’ national insurance contributions, creates additional barriers with firms already struggling to recruit staff.
The government needs to prioritise boosting construction skills if it is serious about having a high-quality construction industry capable of delivering the ambitious housebuilding targets it has set out.
Brian Berry, Chief Executive, FMB
Members also reported difficulties in finding skilled workers, with 28% struggling to hir bricklayers and 35% struggling to hire carpenters.
New Towns Taskforce calls for evidence
The government’s New Towns Taskforce, chaired by Sir Michael Lyons with Dame Kate Barker as Deputy Chair, has launched a call for evidence, seeking proposals “that are regionally significant for both housing numbers and economic growth”.
Applicants can submit as many developments as they wish, but must meet government expectations of “well-connected, well-designed, sustainable and attractive places to live”.
Developments must also feature 40% affordable housing, with each new town containing 10,000 homes “at the very least”.
Homes England heads step down as Shadow Housing Secretary named
Homes England has announced that Chair Peter Freeman and Chief Executive Peter Denton will be stepping down from their roles after four years leading the agency.
Denton will leave in the new year, with Freeman handing over to his successor later in 2025.
Housing and planning minister Matthew Pennycook said: “On behalf of the government, I would like to thank Peter Freeman and Peter Denton for their leadership of the agency over recent years. Their efforts have been integral to reshaping Homes England into an effective national housing and regeneration agency that is increasingly focused on exemplary place-based regeneration and placemaking as well as new housing supply.”
Meanwhile, Kevin Hollinrake has been named Shadow Housing Secretary in Kemi Badenoch’s new Conservative shadow cabinet.
Hollinrake was previously Shadow Business Secretary, and has been MP for Thirsk and Malton since 2015.
Vistry reveals further profit hit as Persimmon and Taylor Wimpey publish results
Partnerships developer Vistry has identified a further £50m profit hit, following a £115m profit warning issued in October.
The firm has uncovered further issues in its South Division, and has also carried out reviews of all six Vistry divisions and found no systemic issues outside the South Division.
The Group still expects to deliver 17,500 homes in the year and post a profit of £300m.
Meanwhile, Taylor Wimpey expects to deliver 9,500 to 10,000 homes in FY24 along with an operating profit of £416m, in line with current market expectations.
In a trading update, the firm said it has seen steady signs of improvement in customer demand during the second half of the year, with a net private sales rate outlet per week of 0.70 (2023: 0.51).
Persimmon is also on track to deliver 10,500 homes in its full year, and has said that customer interest remains “good” across all regions.
The developer also said that it was assessing the implications of the recent Budget on costs.
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