This is a guest article by our Editor Helen Duval
Back in 2012 the then Chancellor of the Exchequer, George Osborne introduced a cap on council house borrowing to cut public sector debt.
This restricted the amount of money that that local authorities could borrow against Housing Revenue Accounts across the UK, that are used to fund new council housing developments.
For builders, Theresa May’s pledge to give councils sweeping new powers that will enable them to build many more affordable homes this can only be good news.
But with many skilled trades across the construction industry still in short supply, with around 15 specific construction areas showing a 40% skills shortage currently, this could be a bittersweet moment for the industry.
The Prime Minister’s recent keynote speech stated that the cap on borrowing for social housing would be scrapped, and this has been described as ‘fantastic’ by local councils, and associated charities which have estimated that a policy change such as this could result in around 27,000 social houses being built each year.
Commenting that the housing market was ‘broken’ will have given a lot of hope to first time buyers and those who had seen the potential ownership of their own home only a far distant dream.
Building new houses to meet demand it would seem is now firmly in focus with home ownership now clearly becoming possible.
“Solving the housing crisis is the biggest domestic policy challenge of our generation. ….It doesn’t make sense to stop councils from playing their part in solving it.” Mrs May commented.
It brings into question however, how many new houses are there likely to be built with this extra cash now available? Investment for this could be around £1 billion per year depending on the amount of councils that will apply to borrow.
Although it was unclear when the cap would be lifted or whether there would be a need for initial legislation to be passed before the policy could go ahead, there has been a really positive response to the news.
Homeless charity Shelter’s Chief Executive Polly Neate commented, “It’s a big step towards helping to repair the damage done by years of under-investment and will let councils fulfil their rightful role as significant housebuilders.”
Lord Porter, Chairman of the Local Government Association, considered the decision “fantastic”, commenting “Our national housing shortage is one of the most pressing issues we face and it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve the housing crisis.”
But with the UK housing crisis needing so much focus, it does beg a question: how will these properties be built and by whom? Considering the lack of suitably skilled construction workers, as highlighted on the BBC during the Build Show at the NEC in October, now really is not the best time to be looking at new developments, if there is a huge lack in skilled construction workers.
The rising cost of materials combined with lack of skilled labourers continues to be a big problem for many building firms, small and large. So how do we encourage young people to see the sector as one where they have potential for future success? Surely, we have to look at ways to incentivise the younger generation, to inspire them away from their smartphones and to boost their self worth through achievement and obvious successes – successes that they can aspire to reach. Inspiring and encouraging them to be successful through reward and achievement must be the way forward if construction is to become an appealing industry to the technology led younger generation.