HBF Wales Parliamentary Newsletter - Autumn 2023

Thu 21 September, 2023


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

We hope you find this new newsletter a useful update on the home building industry’s activities and priorities but if you have any questions or would like to discuss an issue in more detail, please get in touch.

We hope you find the information useful but if you have any questions or would like to discuss the opportunities and challenges facing the homebuilding sector in more detail, please contact:

  • David O’Leary, Executive Director: david.oleary@hbf.co.uk
  • Emma Ramell, Head of Policy and External Affairs: emma.ramell@hbf.co.uk
  • Laura Markus, Policy and External Affairs Manager: laura.markus@hbf.co.uk
  • Laurence Thompson, Policy and Campaigns Assistant: 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 the membership are mostly small or medium-sized enterprises.

‘Housing Pipeline’ reports show planning permission approvals in Wales continue to fall short of housing need

Figures from HBF and Glenigan’s ‘Housing Pipeline’ report show that, despite some improvement in the second quarter of 2023, planning permission approvals in Wales continue to fall short of the numbers needed to tackle Wales’ housing shortage.

The overall number of housing units approved in Wales during Q2 2023 totalled 1,908 – a 29% increase from the same quarter a year ago, and a 26% increase from the previous quarter. This increase has primarily been driven by a rise in the number of units approved on larger schemes of 10 or more units. However, the number of overall housing projects granted planning permission in Q2 2023 was still one of the lowest quarterly figures on record, with 110 housing projects granted planning permission - the same as the previous quarter, and only a 1% rise from Q2 2022 a year ago, which was the lowest quarterly figure ever recorded.

Our previous Housing Pipeline reports also showed that the total number of housing units approved in Wales during 2022 was 29% lower than in 2021 - falling to 8,395 from 11,804.

Planning permissions are a strong indicator of future housing supply, and the figures suggest that housing supply will continue to fall short of demand. The figures come after a period in which Wales has failed to deliver the quantum of housing supply that its growing population requires. Despite the ‘Future Wales: National Plan 2040’ finding that an average of 7,400 homes would be needed from 2019 to 2024 to meet housing demand, the average number of homes completed in Wales over the last five years was just 5,673.

The latest Housing Pipeline report can be found here.

New build buyers in Wales save £163 a month on energy bills, new HBF research finds

New research from HBF has found that new build homebuyers in Wales are collectively saving over £16 million in energy bills, as well as reducing carbon emissions by over 20 million tonnes.

The average new build homebuyer in Wales saves £163 a month on energy bills, amounting to more than £1,900 a year, compared with purchasers of equivalent older properties. This saving rises to over £195 per month for purchasers of houses, rather than flats or bungalows, totalling £2,340 a year.

The research also found that in the year to March 2023, 86% of new build homes were rated A or B for energy performance in Wales, while less than 4% of existing properties reached the same standards. In contrast, over 55% of existing properties were given an EPC of D or below, while less than 5% of new build homes were of the same standard.

The findings come after a winter of high energy prices in which the state of the UK’s housing stock came under increased scrutiny, with the UK having one of the least energy-efficient housing stocks in Europe. The figures demonstrate the value of high energy efficiency standards in the new build market for both buyers and wider society.

HBF has called on the Welsh Government to work with lenders to offer incentives for buyers of energy-saving homes in light of the mortgage market squeeze.

The full findings and recommendations of the UK-wide ‘Watt A Save’ report can be found here.

Welsh councils hold over £71m in unspent developer contributions

New HBF research has found that local authorities in Wales are, on average, sitting on over £5.1 million in unspent developer contributions. The research is based on a sample of 14 Welsh councils who provided data following a Freedom of Information survey exercise, and reveals that more than £71m remains unspent in Wales overall. If extrapolating out to all Welsh councils, around £112m is likely to be held unspent.

As part of the process of securing planning permission, developers are required to make contributions to local authorities that mitigate the impact of development. The purpose of the funding is to invest in community services, facilities and affordable housing to ensure local people benefit from development within their area.

The survey exercise shows that Cardiff City Council holds the most in unspent contributions (£23.3m), followed by Newport City Council (£9.5m) and Pembrokeshire County Council (£8.1m). Pembrokeshire County Council also holds the most in unspent affordable housing contributions in Wales (£4.4m).

This research demonstrates that a lack of capacity or unwillingness to spend developer contributions is preventing communities from realising the benefits that have been paid for by builders. This, in turn, has inevitable consequences for communities’ perceptions of development and the wider narrative around and perception of home builders.

HBF is calling for developer contributions to always be spent according to their negotiated purpose and within their agreed time limit, rather than returned to developers or left unspent.

The full report can be found here.

Latest Help to Buy figures demonstrate the success of the scheme in Wales

Earlier this year, the Welsh Government announced a two-year extension to the Help to Buy scheme up to March 2025. The Welsh Government also announced that, from 1 April 2023, all homes sold through the scheme will need to meet a minimum of EPC B and the purchase price cap will rise from £250,000 to £300,000.

New figures released by the Welsh Government indicate that the Help to Buy scheme in Wales has delivered across all areas. Over the first nine years of the scheme’s operation (1 April 2014 to 30 June 2023):

  • More than 13,700 properties were bought with an equity loan, and first-time buyers accounted for over three quarters of total purchases.
  • 47% of those using the scheme had a household income of less than £50,000.
  • 65% of all Help to Buy purchasers to date in Wales have purchased with a deposit of just 5%, and almost all purchasers would otherwise have been reliant on accessing high LTV mortgages.
  • The 13,700 homes purchased through the scheme will have supported or sustained an average of over 5,000 jobs a year and generated a total of £2.3 billion in economic activity.

Help to Buy Wales has also delivered for the Exchequer, with 40% of all loans repaid in full, at a value of £231.53 million. These repaid loans have seen over £30 million extra returned to the Welsh Treasury, an average uplift of 14%.

HBF has welcomed the decision by the Welsh Government to extend the scheme, which is an important part of the Welsh Government’s wider strategy to improve the Welsh housing market and promote economic growth.

‘Housing the Nation’ report shows a high level of public support for home building

A new report released by HBF shows that there are high levels of public support for new home building in Wales. With the next General Election on the horizon, the new findings from the ‘Housing the Nation’ report demonstrate that beyond a vocal minority, the majority of the public are supportive of new homes to tackle the housing crisis.

The survey shows that 52% of respondents in Wales would support more home building in their local area, and 80% of respondents agreed there is a housing crisis.

The new report also shows that:

  • 51% of respondents in Wales say that housing will be an important factor in determining who they vote for at the next General Election – a higher proportion than in any other part of the UK.
  • 67% believe the housing crisis is making the country less equal and more divided.
  • Only 9% of Welsh respondents were very aware of local planning matters and attended public meetings and/or took part in consultations - suggesting public participation in the planning process remains limited.

The survey makes clear that there is public support for the home building industry in Wales, which delivers a range of benefits to local communities. For instance, in 2021/22, the home building industry in Wales is estimated to have contributed £1.5 million towards open spaces, £4.25 million towards spending on new and improved schools, and £146 million towards affordable housing. Houses built by private developers in Wales across the span of the last Government term - 2016-2021- are also estimated to have generated just under £290 million in tax revenue to be reinvested in the country’s public services and communities.

The full ‘Housing the Nation’ report with survey findings from across Britain can be found here.

New census of the onsite workforce in Wales

A new census of the home building industry’s onsite workforce in Wales reveals the breakdown of the workforce by age, gender, nationality, and ethnicity. The census, conducted by HBF, finds that 95.62% of the workforce are UK/British passport holders, and just 2.86% were from EU/EEA countries. This is a stark contrast to the data from the UK as a whole, where overseas workers account for around 20% of the workforce.

The survey also reveals that the Welsh workforce is overwhelmingly male (94.42%), and the most prevalent age group onsite is 20-29 (30.35% of all respondents).

Furthermore, 58.04% of the workforce were under 40, and almost half of respondents had spent over 10 years in the industry.

The findings come at a time when, as in the rest of the UK, the home building industry in Wales is facing a skills shortage that is hampering housing delivery. The Welsh Government estimates that an extra 11,500 workers will be needed from 2022 to 2026.

The findings of the census can be found here.