Housebuilders are investing in modern methods of construction
and skills to address a number of industry challenges as it looks to deliver
growth and new homes for the future, according to new research from Lloyds Bank
Commercial Banking.
The third annual Lloyds Bank housebuilding report which
surveys housebuilders and their supply chain, analyses the state of the
industry today and the opportunities and challenges it faces in the future.
The sector is
adopting modern methods of construction that hold the potential to boost
productivity and supply. Firms reported that they are already investing in new
building techniques, including modular housing (68%) and panelised systems
(56%).
Housebuilders’ motivations to adopt these methods include
improved efficiency, ease of build, better construction standards and in some
areas increased margins.
As a result, firms’ investment in new building techniques has
increased year on year from 20% of current annual turnover to 24% over five
years.
Innovation is also supporting the delivery of sustainable
homes with 82% of firms saying they are more focused on this issue than ever
before.
An ongoing shortage of skilled workers continues to affect
the sector with a third (31%) of firms saying there is a skills shortage at a
national level. More than a quarter (29%) said they have trouble recruiting
skilled workers in the regions where they operate.
The report also found that the UK’s exit from the EU was
exacerbating the skills shortage, with half (50%) stating that it was making
recruitment harder for specific roles while a quarter (26%) said that access to
EU labour is a key challenge for their business.
On a positive note, the report found a sector tackling the
skills shortage head on, as almost seven in ten firms (69%) of respondents are
investing in staff training, and half (51%) are setting up apprenticeship
programmes.
The research found that, in the face of ongoing uncertainty,
optimism about the future of the housebuilding industry remains steady at 6.9
down from 7.2, with 10 representing the highest level of expectation.
Firms’ growth ambitions also remain strong with the sector
anticipating growth of 29% of current business turnover over the next five
years, up from 28% last year.
Housebuilders expected to invest 31% of their current annual
turnover back into their business over the next five years, still historically
high but down slightly from 35% in the last report.
Firms told us they plan to create more than 139,000 new jobs
in the next five years, which equates to more than 40,000 fewer jobs in the
pipeline than there were a year ago.
David Cleary, Regional Director and National Head of
Housebuilding, Lloyds Bank Commercial Banking, said: “The housebuilding
industry remains upbeat despite issues that have weighed down the sector for
some time including Brexit uncertainty which is contributing to a skills
shortage and inflating the cost of raw materials.
“It is reassuring to see the sector confronting these
challenges head on by investing and planning for business growth, prioritising
staff training and looking at more innovative new building techniques. This has
the potential to boost productivity and, more importantly, increase the
pipeline of new homes that the nation badly needs.
“We fully back the sector in this ambition both by providing
funding solutions and banking services and, through our Housing Growth
Partnership to increase the number of new homes built in the UK. By sharing the
insight in this report we hope to inform decisions at a time when the industry
faces challenges, but also great opportunities.”
Stewart Baseley, executive chairman of the Home Builders
Federation said: “Whilst output is up an unprecedented 74% in the past
four years, the industry faces some huge challenges as it strives to meet the
housing needs of the country. Housebuilders are investing significantly to
address these challenges and ensure the industry has the capacity and skills to
deliver even more, high quality homes. Lloyds’ report provides a detailed
insight into the current climate within which the industry is operating and the
steps being taken to ensure companies can deliver.”
