Good afternoon and welcome to HBF’s 2011 annual lunch. As ever, it’s very nice to see so many old friends and colleagues - and some new faces as well.
It’s been a busy few weeks – something that is set to continue. Next week, for instance, I am off to Denmark on business – however, any rumours that I will be visiting legoland for some new design ideas are completely unfounded.
More seriously it has been a whirlwind 12 months since our last annual lunch and a lot has changed
One thing however that hasn’t hanged – I am delighted to say – is the overall result of our Customer Satisfaction Survey. A year ago they showed a leap in satisfaction levels across the board, something that many said we would not be able to repeat.
Well repeat them we did and this year’s results, again showed outstanding levels of customer satisfaction that rival or better almost all other industries or sectors.
Nearly nine out of ten people are satisfied with the quality of their new home - with the same number saying they would recommend their builder to one of their friends.
There should be a copy of the results on your seat – please take them away and pass them on. They are a remarkable testament to the progress made in recent years across our industry to improve the service and product we offer.
But a lot has changed since we met a year ago. Then, we were in the midst of what had been a very lively election campaign – the highlight of which for many were the first televised leaders’ debates – and the election concluded in extraordinary circumstances and resulted in a coalition Government that many predicted wouldn’t last long.
But last it has – notwithstanding the recent jostling over last week’s AV referendum and local election results.
Indeed, not only has it lasted, it has probably – at least as far as housing policy is concerned - been the most radical Government many can remember.
Every policy that affects our business has seemingly been rewritten from first principles in a whirlwind of change that will take some time to get used to. Indeed we still await a lot of the detail. And it will take even longer for all these new measures to be understood and implemented.
Unfortunately as yet the scale of the housing crisis we face has not changed. It is a very sobering thought that last year we built fewer homes than in any peacetime year since the early 1920s. And despite some stability in both the market and the economy, housebuilding volumes remain at extremely low levels and the lack of mortgages on affordable terms has rendered first time buyers a virtually extinct species.
I was very critical of the previous government for constantly changing housing ministers and I am grateful therefore that Grant Shapps retained his post when the coalition came to power and is still there – I suspect this may be a record tenure in modern times!!. More importantly the continuity of dealing with the same person for several years is very beneficial particularly when we are grappling with such fundamental changes to how we operate.
I have no idea how long he will continue in his role – in recent months there have been rumours that Grant will be moving on to another senor position in Government. But for my part, and whilst not wishing to dampen his ambition nor stifle his career, I hope he stays where he is!
At least for the next hour or so because I am delighted that Grant is here today and in a moment he will be addressing us and no doubt telling us how he feels the policies his Government are introducing are progressing and how ultimately they will deliver his oft stated ambition of increasing housing supply.
I hope that he and his Government sees HBF as a critical friend – we don’t typically conduct discussions through the press or publicly criticize every announcement in order to achieve instant newspaper headlines. But that does not mean we don’t robustly represent the views of our industry to Grant and his colleagues on a range of issues from planning and regulation to the importance of resolving the deposit gap for so many potential purchasers - and the need for Government to play its part.
I think some of the announcements we have seen in recent months have demonstrated the effectiveness of this approach. I was reflecting when preparing for this speech on all the issues we have raised with Grant both before and since the election and whilst I am not normally inclined to claim public credit for HBF’s activities I think we have had some success.
The Chancellor’s flagship announcement on FirstBuy for example was something we have been pushing Government very hard for since HomeBuy Direct finished last September. It will generate some 10,000 very welcome sales over the next year or so. For a Government that had repeatedly said no new money would be forthcoming, an allocation of £250M will undoubtedly help stimulate the market and create many jobs. It is also hopefully a strong recognition of the economic importance of the housing industry and of the Government’s commitment to see a significant increase in home building
We have also seen important announcements on planning reform, including confirmation of a potentially powerful “presumption in favour of sustainable development” in the Plan for Growth published alongside the Budget - followed by a letter to Local Authorities from Government requiring them to modify planning obligations where necessary, to allow stalled developments to proceed.
Indeed, many of the planning reforms trailed in the Growth Plan reflect HBF thinking and are strongly pro-growth and development even if they don’t currently reflect the reality of what is happening in far too many local authorities – and trust me that is a point we are constantly making
Another area HBF has long been campaigning on is the Burden of Regulation. It was therefore heartening to hear the Government accept that ‘housing supply is constrained by the lack of viable land for development’. We have also had the very important Spending Review commitment “to reduce the total regulatory burden on the house building industry over the Spending Review period”.
On Zero Carbon homes we were very pleased to learn that housebuilders will not be responsible for carbon emissions on appliances. This does not mean, as some have suggested, that delivering the zero carbon homes policy is now easy to achieve – far from it – but what it does do is make it more practical and importantly, as far as site viability is concerned, less costly.
It reflects also I believe the tremendous work the Zero Carbon Hub have undertaken over the past couple of years and justifies the vast amount of time we have spent engaging with the many parties involved in the whole zero carbon process – something some said we should not have done. As I’ve said all along – in my view it’s better to be in the tent - even if the temperature is occasionally slightly chilly and the tent is getting less crowded as some have walked out!
Since the Budget we have also had announcements on more public land being made available for development through a ‘build now pay later scheme’, and proposals to make it easier to convert commercial property to residential use.
Don’t misunderstand me, I am not naive enough to think that Government is introducing these measures simply because HBF asked for them. But what they demonstrate to me is that we are listened to and taken seriously and that the Government recognizes the vital role housebuilding can play in achieving its growth agenda with the economic benefits increasing housing supply brings in terms of job creation and generating economic activity.
The measures we have seen, however, must only be only a start. Firstbuy for example will only help a fraction of the first time buyers in need of assistance, and as many of you tell me, is not an option for many developers.
And I recognise only too well the stretch between the Government’s concept for increasing development through incentives and the reality of what home builders experience all too often at local level where Nimbyism continues to rule in far too many areas.
The industry has adapted remarkably fast to the new world and stands ready to play its part. So it is vital Government gets its message through to local authorities.
Grant, you have always said that if it becomes clear the carrot is not working you would look at improving it. Well I don’t know whether the national finances can run to a bunch of carrots but, if not, based on what we are seeing in far too many parts of the country other means for encouraging and enabling improved supply may well be required because I am sure we all agree we simply cannot continue with current levels of supply, if we are not to deepen an already serious national crisis.
But we all know that it’s a marathon not a sprint – and on that note a little birdie tells me Grant has plenty of experience of marathons, even if he doesn’t run them quite as quickly as his wife...
Another little known fact about Grant is that he’s a huge fan of Nandos. I am afraid we haven’t got Portugeses piri piri chicken today, but I assure you, if you succeed in sorting out the planning system, we will get it on the menu for next year.
Ladies and Gentleman please give a warm round of applauds for our guest speaker today to the Rt Hon Grant Shapps