Conversation needed in Wales on issues faced by smaller house builders
IJOINED my family business, Hygrove Homes in 2011, with a role focused on commercial and legal services. As such, I have long dealt with the issues facing our industry,
After the last election of the National Assembly for Wales, Welsh Government committed to building 20,000 affordable homes during this Assembly term; one would have expected this to have resulted in an increased amount of work for small housebuilders and yet across the UK today smaller housebuilders are responsible for just 12% of new homes, compared to four in 10 in 1988.
If Welsh Government’s ambitious targets are to be realised action must be taken to encourage small housebuilders to increase their activities with a view to increasing their share of the market.
To enable this to be done, Welsh Government needs to get to grips with the heightened challenges faced by small housebuilders today and to consider what can be done to assist small housebuilders to deal with these issues.
I was privileged last year to be invited to give evidence to a UK All Party Parliamentary Group in an inquiry examining the issues faced by small house builders.
The All Party Parliamentary Group (APPG) on Small and Micro Business has now published its report following the inquiry, and has called for a “Dedicated Strategy for Small Housebuilders”. This is something that FSB has backed as a means of supporting smaller housebuilders across England.
Given that the majority of issues affecting smaller housebuilders in Wales are devolved, we need a similar conversation in Wales.
One of the key issues facing smaller housebuilders is access to finance. Small housebuilders are more reliant on financing than bigger builders with large reserves of cash.
The financial crisis led to the withdrawal of a number of mainstream lenders from the sector and this has resulted in a steady decline in the number of small housebuilders.
As a means of tackling this issue, the MPs behind the UK Parliament inquiry are calling for a UK Government backed guarantee on loans to small housebuilders.
Further action also needs to be taken to encourage the redevelopment of brownfield sites which are seen as areas of land more likely to attract the attention of small housebuilders. There is a need to recognise that brownfield sites are more expensive to develop and allowances need to be made for those that develop these sites in the form of increased density and relaxed planning obligations permitted by Local Planning Authorities.
Particular attention must be paid by Welsh Government to the role of utility companies. This is an area in need of review and the Welsh Government needs to encourage greater responsiveness within these sectors, which will result in reduced cost to small housebuilders.
An important part of my role within our business is to deal with the issues affecting the future of the skills base in the construction industry.
We work with schools in the Swansea area to attract young people to the sector and this is something that we have always been proud to work hard to achieve; both as a means of ensuring the sustainability of the construction industry but also as a means to introducing young people to good quality work experience.
The industry is facing a massive skills shortage. An ageing workforce approaching retirement coupled with decreasing numbers of school leavers selecting construction as their career path and the onset of Brexit are all contributory factors.
Unless more is done to encourage youngsters into the industry, particularly in key trades like groundworks, the issue will soon hit crisis levels.
At FSB Wales we welcomed the UK Parliament’s cross-party approach to supporting smaller housebuilders and hope that this will kick start the conversation in Wales – with all parties playing an important role in tackling the issues faced by smaller house builders.
■ Ben Francis, FSB Wales Policy Chair