HBF Parliamentary Newsletter – Spring 2024

Wed 17 April, 2024


In this Parliamentary Newsletter, we update you on work to progress the many ongoing and new challenges affecting the home building industry, including an overview of the Home Builders Federation’s (HBF) new reports and campaigns.

We hope you find the information useful but if you have any questions or would like to discuss the opportunities and challenges facing the home building industry in more detail, please contact Laurence Thompson, Policy and Campaigns Officer, at laurence.thompson@hbf.co.uk.

About HBF

The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. Our members are responsible for providing around 80% of all new private homes built in England and Wales, and are mostly small or medium-sized enterprises.

‘Housing Pipeline’ report shows planning permission approvals have fallen to a record low

HBF’s latest Housing Pipeline Report, containing planning permissions data supplied by Glenigan, shows that 2023 saw the fewest number of sites approved since records began in 2006.

The report, covering the period to the end of 2023, also found:

  • 10,527 sites were granted permission in 2023, a 16% decrease on 2022.
  • The number of units gaining planning permission in England during 2023 dropped to the lowest for any 12-month period since 2014.
  • At under 233,000, the number of units approved in 2023 was 20% lower than the total approved in 2022.

Planning permissions are a lead indicator of future supply levels, and the latest data confirms industry warnings that an increasingly anti-development policy environment, including new taxes on building and challenging conditions for homebuyers, is resulting in decreased investment in future housing delivery.

View the Housing Pipeline report on the HBF website.

Housing Pipeline Quarter 4

Limited progress since the 2004 Barker Review of Housing Supply, HBF analysis shows

New analysis from HBF marking the twentieth anniversary of Dame Kate Barker’s Review of Housing Supply has found that only 11 of the Review’s 36 recommendations are currently in place - with most indicators of housing affordability having worsened over the past twenty years since the Review’s publication.

The Review was commissioned by the Treasury to address decades of undersupply, and was hailed as ‘the most detailed analysis of the housing market in 50 years’ upon its publication in 2004.

However, HBF’s ‘Beyond Barker’ report shows that only limited progress has been made to deliver on the Review’s recommendations:

  • Less than a third of the recommendations remain in place.
  • The Government’s recent changes to the National Planning Policy Framework (NPPF) have rolled back progress in implementing 3 of the Barker Review’s recommendations to improve the housing market.
  • England would have 2 million more homes today if the Barker Review’s most ambitious scenario for increasing housing supply had been achieved – equivalent to the entire housing stock of Ireland.

Reflecting on the Review twenty years on, Dame Barker notes in the report’s foreword that “the prospect of 300,000 new homes a year in England seems as far off today as it did in 2004”.

The report makes several recommendations which echo those Dame Kate Barker put forward in 2004:

  • Ensuring Local Planning Authorities are placed on a self-sustaining financial footing for the long term.
  • Re-introducing mandatory housing targets and the requirement to demonstrate a continual five-year supply of land - requiring a reassessment of the Government’s December 2023 changes to the NPPF.
  • The wider use of standard template agreements and other measures to minimise delays in Section 106 negotiations.

View the ‘Beyond Barker’ report on the HBF website.

Competition and Markets Authority (CMA) report finds the planning system is responsible for housing shortfall

After a year-long investigation, the Competition and Markets Authority’s (CMA) market study concluded that the planning system and under-resourced planning departments are the main barriers to housing delivery, with the report stating that “the planning system exerts a significant downward pressure on the overall number of planning permissions being granted across Great Britain”.

The CMA’s report, published on 26 February, also concluded that land banking is a result of the complex planning system, rather than deliberate industry practice. The study was launched last year to examine the overall nature and outcomes of the housing market.

Several recommendations to the Government were also outlined in the CMA’s report:

  • Introduce clear and consistent targets for local authorities that reflect the need for new homes in their area;
  • Ensure local authorities put in place local plans;
  • Streamline the planning system to significantly increase the ability of housebuilders to begin work on new projects sooner;
  • Require councils to adopt amenities on all new housing estates.

HBF provided the following statement in response:

“The CMA report recognises the challenges the industry faces when looking to deliver homes.

“We welcome recognition that the planning system is a fundamental barrier to delivery and adds unnecessary delay and cost into the development process, and the need for local authorities to have plans in place and properly resourced planning departments. We also welcome the CMAs recognition that house builders do not land bank unnecessarily, that supports a number of similar investigations over recent years.

“We are committed to working with the CMA and Government to introduce their recommendations and ensuring we can create an environment within which we can deliver the homes the country needs.”

View the CMA’s housebuilding market study on the Government website.

SME home builders identify the planning process as the main barrier to housing delivery

Delays in securing planning permission are the main barrier to growth for SME home builders, a new report shows.

The ‘State of Play’ survey of SME home builders, conducted by HBF alongside Close Brothers Property Finance and Travis Perkins, shows that 93% of SMEs surveyed agree planning delays are a major barrier to delivery.

The report, released in January, also shows that:

  • Nine out of 10 (91%) SMEs agree planning departments in local authorities are under-resourced, which is hindering the growth of SME home builders.
  • 46% of SME developers say the cost of obtaining planning permission has risen by over 30% in the past three years – even before last December’s planning fee rises were introduced.
  • Almost three-quarters (72%) claim interest rate rises have been a major obstacle in the past year.
  • Just 13% think the Government’s current approach on housing and planning was positive for first-time buyers (down from 39% in 2022).

The report also outlines several actions the Government could take to support SME home builders, including:

  • Ensuring Local Planning Authorities (LPAs) allocate a greater supply of small sites in Local Plans.
  • Streamlining the Local Plan process to make land available faster.
  • Increasing resources and efficiency within LPAs.

View the ‘State of Play’ report on the HBF website.

SME survey

HBF response to Spring Budget 2024

HBF provided a submission to HM Treasury ahead of the Spring Budget. The submission outlined a number of key policy proposals to improve the supply and affordability of housing, including ensuring Local Planning Authorities (LPAs) are placed on a more sustainable financial footing; raising Stamp Duty Land Tax (SDLT) thresholds to encourage moves across the market; and introducing a new, targeted home ownership scheme for first-time buyers.

It was disappointing that many of these recommendations were ultimately not adopted in this year’s Budget. Following the Budget, HBF issued the following comment:

"Amidst a housing crisis and with house building levels falling sharply, it is disappointing that the Chancellor passed up the opportunity to tackle one of the country’s biggest challenges. The dream of home ownership continues to slip away from younger generations while anti-development planning policies are already seeing fewer new homes built.

The OBR has shown today that a faltering housing market is costing the Exchequer billions of pounds in tax receipts while a retrograde planning policy agenda is hitting investment and already reducing employment. As well as the obvious social problems it has caused, the housing crisis now has deep-rooted economic consequences.”

Affordable housing under threat

HBF research has found that a lack of bids for Section 106 units has left thousands of Affordable Homes uncontracted, with numbers likely to grow over the coming years.

Private sector housing delivery is now responsible for the provision of almost 50% of all affordable homes, with around 140,000 new affordable homes delivered over the past five years as a result of private sector cross-subsidy. However, this contribution is increasingly at risk as home builders are finding it difficult to fulfil their S106 requirements due to a lack of bids from Registered Providers (RPs).

Due to these growing concerns, HBF recently conducted a survey of large and medium-sized home builders which found that as of March 2024, there are almost 13,000 (12,888) S106 units with detailed planning permission that are currently uncontracted. Most concerningly, of the units for which a completion date was provided, more than a third (37%) are due for completion in 2024/25. This represents a significant proportion of the likely Section 106 Affordable Housing delivery over these two years.

Additionally, HBF is aware of at least 38 sites that are currently delayed across the country due to uncontracted S106 units. Others are at risk of stalling as the developer is close to the threshold of how much open market housing can be constructed before S106 units are delivered.

To overcome these issues, respondents to the survey reported that S106 units are increasingly being converted to other tenures, such as First Homes or Rentplus. While these are both valuable tenures, there is a significant need for more social rented and Affordable Rent Homes. With the number of households on local authority waiting lists the highest in a decade, it is vital that swift action is taken to support the delivery of these much-needed homes.

There are also many cases of LPAs unwilling to consider cascade arrangements as part of Section 106 agreements leaving house builders in limbo with legal obligations to provide Affordable Housing but with no active market to provide these into.

HBF and members have already raised the challenges with DLUHC and with Homes England, but we would welcome any action you could take to draw further attention to this issue. For further information, please do not hesitate to contact a member of the team.

Over 90% of new build home buyers would recommend their builder to a friend

HBF has published the results of its 2024 Customer Satisfaction Survey (CSS), which show that more than 9 out of 10 of new build home buyers would ‘recommend their builder to a friend’, the fourth successive year that the industry has achieved a score of 90% or above.

The survey is sent by home builders to the purchasers of new build homes 8 weeks after they move in, and the results are released annually. The 2024 results also show that:

  • 87% of respondents were satisfied with the quality of their home.
  • When respondents were asked about the service and completion time provided by their builder, 85% were satisfied with the service provided during the buying process.
  • 79% were satisfied with their completion time.

The results reflect the work the industry has been doing to improve build quality and customer service. Since the survey was launched more than a decade ago, scores in all question areas have improved significantly. Furthermore, developers building the majority of the country’s new homes have voluntarily registered with the New Homes Quality Board (NHQB), providing customers with access to the independent New Homes Ombudsman Service, which should result in further improvements to satisfaction levels over the coming years.

View more details of the results of the National New Homes Customer Satisfaction Survey on the HBF website

Parliamentary skills reception champions new entrants into the home building industry

HBF hosted a parliamentary reception on Tuesday 12 March to highlight the diverse range of training opportunities and entry routes available in the home building industry.

The ‘skills showcase’ event was attended by MPs and Lords from across the political spectrum, who were able to meet apprentices, trainees and graduates in the industry as well as representatives from a range of developers across the country.

The event, sponsored by Northampton South MP Andrew Lewer, also highlighted the ongoing work by HBF and its members to develop the qualified workforce needed to construct high-quality and energy-efficient new homes.

Stewart Baseley, Executive Chairman of the Home Builders Federation (HBF), said:

It is great to see so many Members of Parliament, apprentices and trainees join us to highlight the great work new entrants into the industry are doing.

"The development of new skills for the construction of high-quality and energy-efficient new homes is a key priority for our industry, and this has been a great opportunity to showcase this work.

"However, whilst significant progress is being made there is much more to do. More support from Government is needed to expand the workforce and equip new entrants with the green skills they need for the future.”

Skills reception

HBF’s Women into Home Building programme celebrates impactful first year

HBF’s Women into Home Building programme has celebrated a successful first year, with 160 women taking part in the initiative since its launch in January 2023. The programme’s Impact Report, released in February, shows that the initiative provided in-depth training and support to 69 women and supported 47 women to complete its three-week scheme.

The Women into Home Building programme was set up by HBF in collaboration with Women into Construction and nine major home builders to create more opportunities for women to gain the skills and knowledge to begin a career in site management. The scheme also aims to address the gender imbalance in the home building workforce, with women currently accounting for just 4% of site managers in the industry.

The second year of the scheme was launched in March, with applications to the programme now being accepted. Site management work placement opportunities are available to women across the country.

Jenny Herdman, Director for HBF’s Home Building Skills Partnership, said:

“Having women in onsite leadership roles expands perspectives, introduces different leadership styles and boosts creativity. The collaborative approach to developing and delivering the Women into Home Building initiative reinforces industry’s commitment to increasing the diversity of the workforce.

“Our programme has been developed to both expand awareness of the leadership careers available and routes to employment, whilst giving participants employer-backed knowledge and experience to enhance their skills and kick start their careers.”