Home Builders Federation – Written evidence (UKH0044)

 

Introduction

The Home Builders Federation is the representative body for home builders in England and Wales. HBF’s membership of more than 400 companies contributes around 80% of the private new homes completed in England and Wales and encompasses private developers and Registered Providers. The majority of HBF’s home builder members are small or medium-sized companies.

Summary

HBF welcomes the opportunity to contribute to the House of Lords Built Environment Committee’s inquiry into meeting the UK’s housing demand.

The home building industry has made considerable progress in increasing housing supply in recent years with net housing supply now at its highest level since the end of the Second World War. The speed and scale of the housing output increases we have seen in the past eight years are unprecedented with supply doubling in very short order and being sustained at around a quarter of a million net additions for several years now, even through the pandemic.

However, there are still a number of barriers hindering the industry’s ability to meet consumer demand and government targets. These include, but are not limited to, the decline in SME developers, skills shortages and the planning process. We address each of these issues, and more, in our response to the questions below.

1. What is the current composition of the UK’s housing sector? How is the sector structured in terms of private ownership, privately rented accommodation and social housing?

The lack of reliable data on the breakdown of new housing supply is a fundamental weakness that belies the significance of this issue politically, economically and socially. Reliable data on housing supply, via MHCLG’s Net Supply of Housing Statistics data series is published only once per year, in November, some eight months after the end of the financial year it is relevant to. This inhibits swift and effective policymaking and leaves us reliant on tangential data series to understand what is happening in the contemporaneous context. In this regard, we rely on issuance of Energy Performance Certificate (EPC) statistics, published on a quarterly basis. However, again, as with the main Net Supply figures, this does not break down output by tenure or source.

With a series of proxies, including dwelling stock estimates and EPC data, we can begin to piece together a picture of how output is shifting, but it is still more difficult than it should be.

Home ownership is a clear priority for policymakers, reflected in household attitude surveys in which a large proportion of respondents frequently state that home ownership is their preferred tenure. It is pleasing, therefore, that first-time buyer numbers have been relatively strong over recent years. This is largely due to the success of the Help to Buy scheme. As well as creating the conditions for the new build sector to outperform the wider housing market, the initiative also supported a trend towards first-time buyers occupying a more significant proportion of the market than was traditionally the case. While the home mover market prior to the pandemic had seen a long period of stagnation in activity levels, first-time buyer activity recovered strongly following the introduction of Help to Buy in April 2013. It remains to be seen how this will be affected by the withdrawal of Help to Buy over the next year.

Although, in the main, the past eight years have been successful for house builders in rapidly boosting housing supply, there are a number of items of additional expenditure that will hit the industry in the coming years. These include costs associated with the Future Homes Standard and other environmental issues, biodiversity net gain, building safety related costs including the Residential Property Developer Tax and electric vehicle charging requirements. While HBF and its members do not oppose many, if any, of these additional costs, the idea that developers can afford to absorb additional costs or that land values will flex accordingly to allow for additional expenditure in the process of residential development fails to reflect the full picture and does not stand up to scrutiny when considering the sheer volume of additions to the overall burden of development which await the industry on the horizon or the impacts that could be felt as a result. Moreover, the likely short-term impact is likely to be seen in the extent to which private housing delivery is able to cross-subsidise Section 106 investment, most notably Affordable Housing. Currently, out of around £7 billion per year of Section 106 contributions, more than £4bn goes towards social rented, affordable rent and Shared Ownership properties and private cross-subsidy is now responsible for more than half of all new Affordable Homes completed each year.

2. What social and demographic factors shape housing demand in the UK? What are the expected future trends in housing demand?

Historically, housing need and demand calculations have relied primarily on population and household projections. Both of these datasets are produced biennially by government agencies (either ONS or MHCLG).

 

However, these projections are, literally, just projections. They project forward based on the trends of the past and, therefore, fail to take account of drivers of change such as economic growth and aspirations for different regions of the country. Trends, such as increasing house prices and availability of stock (in whatever tenure) mean that the projections hide the demand from younger households. These “hidden households” manifest themselves in the demographic data as an increase in the average age of first-time buyers and this trend, rather than being reversed through ambitious increases in housing targets, are baked in to the household projections, thereby generally lowering the household projection figures.

 

Regional trends and aspirations are also not adequately reflected in the projections. An area that is seeking to change its economic opportunities may need to change outward migration and retain or increase its population. However, the population and subsequent household projections will merely reflect the past trends of outward migration from an area and not adequately reflect these aspirations for change.

 

Similarly, large urban areas will impose housing pressures on their surrounding hinterland, many of which are in different administrative areas, meaning that unmet needs in the urban area must be catered for in the surrounding area. The lack of a regional (or larger than local) level of planning means that such needs (particularly those of London) will, inevitably, remain unmet rather than being reflected in the demographic datasets behind the projections.

 

The HBF has, therefore, welcomed the addition of other indicators, such as affordability ratios, into the calculation of local housing needs. This proxy for housing pressure is an essential addition to modelling future housing needs, particularly at a spatial, rather than a national level.   

However, the publication of the National Planning Policy Framework (NPPF) in 2012, placed the onus on local planning authorities to calculate their own housing needs based, not just on these national projections, but to include other indicators and factors such as affordability ratios and “market signals”. Although stated in the NPPF as a “standard methodology” there was no consistent approach to the calculation, allowing every LPA to use different indicators to arrive at their own figure of housing need.

 

3. Does the Government’s target of 300,000 new homes per year accurately reflect housing demand? Is this target achievable?

It is important to differentiate between headline demand and effective demand. The latter is demand that is realisable without constraint from other market. The 300,000 target reflects headline demand as demonstrated through a range of housing affordability and other indicators. However, whether this demand can successfully and sustainably be converted into effective demand is less certain. Most notably the availability of appropriate mortgage finance is critical in determining the achievability of this target. It should be noted that prior to the introduction of Help to Buy, more than 80% of builders in HBF’s monthly survey stated that accessible mortgage finance for prospective buyers was a barrier to housing delivery. Following the scheme’s introduction, almost overnight, this number fell to around 10% and has remained at around this level ever since.

 

Home builders have, through unprecedented effective demand, doubled housing output in six years and continue to demonstrate intent to build more by maintaining this investment even with an uncertain period ahead. Last year, the industry produced more than 250,000 new homes with net housing supply levels currently exceeding the records achieved in the 1950s and 1960s.

 

The 300,000 net additions target is extremely ambitious. Developers are committed to helping the Government achieve this but there remain a number of issues hindering increases to housing delivery. The range of issues are detailed further in response to question 6.

 

4. What is the balance of demand for new housing between homes for private ownership, privately rented homes, and social housing? How does this affect the type and tenure required of new homes?

The use of Strategic Housing Market Assessments by local authority areas has been of significant assistance in seeking to balance planning for housing of different tenures. However, tenure split is certainly not an exact science, and many households move between tenures across the course of their lives. Indeed, even individual dwellings can easily move between tenures, most obviously between the owner occupation and private rented sectors but also between affordable rent and private ownership.

 

The cross subsidy of affordable rented dwellings by market sale dwellings is a long-established practice but is driven more by viability and local land values than about meeting different housing tenure needs in a local area.

 

5. What can be done to ensure there is a good balance of new homes where they are needed across the UK?

We support the use of a standard methodology for calculating the housing need and requirement of a local authority. However, while it is important that the figure for the country as a whole meets housing needs, there is no reason why each local planning authority should “consume its own smoke”. HBF was a supporter of regional planning primarily because this allowed a debate regarding opportunities and constraints across a much larger geography than an individual local authority to be held, meaning housing needs could be met across a wider geography encompassing obvious and natural housing market areas and employment areas. It is, therefore, lamentable, that the duty to cooperate did not achieve a more positive response from local authorities. Similarly, first attempts at producing joint spatial strategies have not received the political buy-in that would help deliver spatial strategies across a wider area.

We would support the production of a national spatial strategy with sub-national housing requirements set out clearly within it.  

6. Is the construction sector able to deliver the UK’s housing demand? What barriers are facing the sector?

There are a number of challenges impacting the home building industry’s ability to deliver the required number and mix of housing units that the UK requires to meet current and future demand. The major barriers are discussed below.

 

Materials shortages

Since the start of the coronavirus pandemic and initial lockdown, homebuilders have found it increasingly difficult to access the material required to deliver the homes in demand. An increase in construction activity is one of the major drivers behind global economic activity growth as countries emerge from various lockdowns, but with more and more materials going into short supply, this growth is at risk of being constrained. Timber, roof tiles and bagged cement have been particularly difficult for UK builders to access. There is little sign that these shortages look set to resolve in the coming months and the ongoing shortages have seen exponential increases in material price, creating a dual plight for developers.

 

SME builders

While the home building industry as a whole has seen impressive growth in recent years, housing delivery has increasingly relied on a smaller number of large developers whilst SME builders have continued to face a number of obstacles which, in turn, hinders the Government’s ability to reach its 300,000 new homes target. In 1988, small developers were responsible for four in every ten new build homes, compared to around just 10% today.

 

Looking at housing levels of the past, supply has peaked at the same point that smaller companies have been flourishing – for example during the 1980s. HBF’s report, Reversing the decline of small housebuilders, finds that even returning to the number of firms operational in 2007 could help boost housing supply by around 25,000 homes per year.

 

Some prominent hurdles SME developers identify are:

 

Planning

The planning process is undoubtedly the biggest obstacle that developers face in meeting the governments housing targets. Over the past 30 years the process of obtaining planning permission has become riskier, costlier, and more complex. As with the other issues outlined above, the burdens of the planning system are felt more acutely by SME builders.

 

While commentators and campaigners devote airtime and column inches to the overarching planning system, the less headline grabbing frustrations of the planning process are often a much bigger cause of concern for smaller home builders.

 

HBF’s survey of SME builders in 2020, found that 83% of respondents believe planning delays will remain a major barrier to housing delivery, with 73% of SME housebuilders seeing a lack of resource in local authority planning departments as a major barrier.

 

A summary of the key issues within the planning system can be found below:

 

HBF has welcomed government announcements over the last 12 months to reform the planning system. However, it is important that in the interim Local Authorities do not use this period of flux to halt the development of local plans. This would risk a paralysis that would result in fewer homes being built and depriving local communities of the economic benefits that development provides. Consequently, we are urging the Government to ensure that councils who fail to deliver local plans are still subject to sanctions.

 

Despite claims by the LGA that developers are ‘land banking’, recent analysis from Lichfields finds that, to reach the government target of 300,000 new homes per annum, 1.5m homes need to be built over a five-year period. In accordance with the NPPF requirement for local authorities to maintain a rolling five-year housing land supply, the number of homes with planning permission at any one time will need to be aligned with this objective, which means figures in excess of 1 million should be expected. In reality, the number of homes with planning permission will need to exceed the size of the pipeline, because some permissions will be delayed, re-planned or lapse, and some will deliver homes beyond a five-year horizon. It is important that this is taken into consideration as planning reform progresses and that developers are not penalised for an apparent disconnect between planning permission and sites built out.

 

Highways

In recent years, issues with Section 278 and Section 38 agreements, both of which relate to alteration of existing highways or adoption of new roads as a part of a planning approval or subsequent to receiving planning consent have become a major source of frustration for developers.

 

Currently, highway authorities are allowed large degree of autonomy to set their own rates for these agreements and there are no standard timescales for approval. For our many small and medium-sized members this leads to significant costs, programme delays and additional uncertainty.

 

HBF recently undertook a third annual Freedom of Information exercise which found that bond values range from £1,500 per development to nearly £1 million per development whilst inspection fees vary from 3% to 30% of the cost of the works and the average bond value has increased by 35% in the last three years alone. Additionally, and perhaps even more damaging for the industry and our efforts to accelerate housing supply, is the length of time it takes for applications to be approved. It now typically takes a minimum of four or five months, and in some cases can take up to a year, from the submission of technical designs to approval by the relevant highway authority.

 

Whilst the issues raised above are a source of frustration for large developers, we are increasingly concerned about the impact the situation is having on SME builders, who are less equipped to wade through the process. The lack of a national standard is resulting in extra unforeseen costs, which can easily cripple SMEs balance sheet and affect scheme viability. Furthermore, the varying levels of delays to the process are not only a source of exasperation, but also often have financial implications with businesses struggling to plan effectively.

 

We believe putting in a place a nationally agreed set of requirements including statutory timescales and consistent charging criteria for highways approvals and adoption would solve many of these issues, reduce delays and is something that both developers and highway authorities have expressed an interest in pursuing.

 

7. The Government has published its proposals for reform of the planning system. How can the planning system be shaped to meet housing demand?

The planning system plays an essential role in, firstly, ensuring we plan for the right amount of housing in the places where we need it and, secondly, ensuring that housing can be delivered against such requirements. It is critical that we continue to make robust, evidence based, assessments of housing requirements, both across the country as a whole and for individual local authority areas and that these calculations are consistent and comparable. The use of a standard methodology for calculating housing needs and a clear and transparent methodology for meeting unmet requirements from one area to another (especially London and the wider south east) must be facilitated through the planning process.

 

         What role should permitted development rights play in this?

Permitted development rights are not, in themselves, a way of meeting housing needs. Rather they are part of the delivery mechanism for meeting the housing needs identified through other ways. The allocation of greenfield sites, redevelopment of previously developed land and the reuse of existing building can all play a part in meeting housing needs. The mechanism within the planning process will differ for different types of development. Permitted development rights are a simplified planning process that reduces burdens on local planning authorities for development that would be likely to receive planning permission. Its role within housing delivery is, therefore, to remove burdens and bureaucracy and allow faster delivery of housing in specific circumstances.   

         How might changes to Section 106 agreements shape the provision of social housing?

It is a concern that the delivery of over half of the affordable housing delivered every year in this country comes about through cross subsidy from market sale housing. Proper planning for larger developments should, of course, provide for many different types of housing, including a choice of tenure. This choice was the original driver behind the securing of an element of affordable housing within major development schemes. However, this cross-subsidy model is more a reflection of land value and viability assessment of individual developments than about creating mixed tenure development. This is clearly demonstrated by the huge disparity between the amount of affordable housing secured in higher housing market value areas than in lower value areas where cross-subsidy is less viable.

The government’s current proposal for a single payment infrastructure levy, to include contributions towards the provision of affordable housing would appear to offer greater flexibility to housing enablers to meet local priority needs across a wider housing market (including the second-hand stock) rather than relying on all developments providing on-site affordable housing as a pre-requisite of gaining planning permission.

         How should communities be engaged in the planning process?

Local communities should be more engaged with the local plan making process and, once allocated and adopted through the local plan process, the principle of development on sites should not be reopened. Greater weight should be given to the silent majority, particularly those disenfranchised in the current housing market, rather than the vocal minority, particularly when deciding policy compliant planning applications.

 

Modern society and modern practices use digital technology. It is lamentable that the planning process continues to rely on antiquated processes to engage the public. Direct subscriptions to notifications regarding planning applications and evolving local plans should be commonplace rather than novel and the examination of plans and proposals should be widely available online. While some people cite accessibility to the internet as a constraint there are as many people for whom physical accessibility to visit Council offices is a similar constraint.

The development industry already uses dedicated websites and social media to engage with the public and local communities on development projects. There is no reason why local planning authorities and the planning process should not use such tools in order to give more households the opportunity to contribute to debates about the future of their communities. 

8. What can be done to improve the quality of new homes? How can the design and aesthetics of new homes be improved?

Great progress has been made in recent years with regard to the quality of new build homes. HBF’s 2021 Customer Satisfaction Survey delivered a fourth successive year of improved customer satisfaction. The results from the survey show that:

 

The industry has acknowledged that more can be done to improve the quality of new homes and the service it provides to customers. Since the publication of the APPG report ‘more homes fewer complaints’ in 2016 HBF has been leading on a series of work steams aimed at driving up standards of service and quality, including the reports number one recommendation, putting in place a new homes ombudsman scheme.

 

This work led to the creation and launch last year of the independent New Homes Quality Board (NHQB), a board comprising of representatives from across the sector including consumers and led by an independent chair, Natalie Elphicke. The NHQB is now taking forward the work to create a new framework that will have responsibility for customer service and build quality. HBF and the industry continue to support and work closely with the NHQB on its proposals.

 

The NHQB has recently consulted on a new industry code of practice that will fundamentally change how the industry is required to deal with its customers. It will require a step change in how builders manage the sales and after care processes and how they treat their customers and will require them to have strict time lined and effective complaints procedures in place to deal with any issues customer have with their new home.   

 

The NHQB will also appoint an independent New Homes Ombudsman Service to provide independent redress in the instances when a customer is not happy with how their builder has dealt with any issues they have had.

 

The new proposals will align with the requirements of the Building Safety Bill and have the support of Government and the intention is to have them in place for the start of next year. We believe the new requirements will deliver a step change in how the industry deals with and treats its customers and provide even more confidence for consumers in their new home and their builder. All the arrangements will be paid for by industry and the NHOS will be a free to use service for consumers.

 

9. Is the workforce equipped with the professional, digital and other skills required to meet housing demand, for example in the construction, planning and design sectors? What can be done to overcome skills shortages?

The home building industry as a whole is facing a severe skills shortage which has the potential to undermine further increases in the supply of new build housing. Research undertaken by HBF’s Home Building Skills Partnership, supported by the Construction Industry Training Board (CITB), has found that for every additional 10,000 houses industry builds, we need to recruit 8,000 workers.

 

There are a number of reasons why the home building industry is facing a skills shortage, including:

•         A shortfall in number of recruits entering roles through the education system - the industry has not attracted enough new recruits to the homebuilding sector in recent years.

•         A severe loss of skills during the previous recession – 40-50% of skilled labour left the industry.

•         Increases in demand – Industry has delivered an unprecedented increase in supply in recent years

•         An ageing workforce – 20% of the homebuilding workforce is aged over 50 meaning the sector is facing an impending retirement cliff edge.

 

The home building industry is being proactive by taking steps to ensure that the sector has access to the talent pipeline necessary to deliver the homes this country needs. In 2016, HBF in conjunction with CITB established the Home Building Skills Partnership (HBSP). The purpose of the HBSP is to develop, grow and sustain a programme to provide the necessary workforce. It is focused on attracting new entrants into the industry, and on providing focussed training to develop the qualified workforce needed to construct today’s high-quality new homes.

 

The skills shortage has been an issue for the construction industry for many years, resulting in a reliance on migrant workers, particularly from the EU. In 2017, HBF carried out a census of the home building workforce which found 17.7% of workers come from the EU. This issue is more pronounced in some areas of the country than others, such as in London where 49.5% of the workforce are from an EU country. Although the industry is taking active steps to ensure that the UK has the necessary talent pipeline, it could take many years to deliver these results. In the meantime, we are concerned that recent immigration reforms will make it harder still for the industry to access the workforce required to meet housing demand and this has been compounded by the Home Office’s recent decision to reject the MAC’s recommendation to add a number of construction-based jobs to the Shortage Occupation List (SOL). As such, we would encourage the Government to keep the impacts of the arrangements, and its decision regarding the SOL, on the construction industry under constant review.

 

10. How does the Government interact with Local Authorities to deliver more homes? How can this relationship be improved?

It is critical that, no matter how many homes we want to deliver, we must plan properly to deliver them. Therefore, not only is it essential to be able to calculate how many homes we should deliver it is vital that we ensure that the planning process brings forward enough sites to allow for their delivery.

 

There are three essential elements of housing delivery that require collaboration between central and local government:

 

The most recent national planning policy guidance on calculating housing needs is set out in the national planning guidance. However, despite the Government previously considering that housing needs should be based on the most up-to-date evidence, the standard methodology has continued to rely on the 2014-based household projections, an adjustment for affordability ratios and a cap (to avoid any massive increase in housing requirement from previously adopted development plans). The introduction of these other factors and indicators into calculating housing requirements is supported by the HBF. Population and household projections are exactly that – projections of past decisions. The introduction of an affordability ratio into the methodology is a proxy for previous constraints on supply and delivery – an important factor in meeting future housing needs.

 

Following a consultation on a proposed new methodology for housing need held in Autumn 2020, the government further proposed including a further element of a proportion of the existing housing stock as being part of the standard methodology for calculating housing needs. In essence, this was a proxy for natural growth within an area. The new methodology also meant that areas in the South East of England would be required to increase housing provision above the level for which they were already planning. This proposal caused considerable political fallout, particularly in the South East. Indeed, many commentators have suggested that it was a major factor in the result of the Chesham and Amersham by-election, which saw the Conservatives lose the seat to the Liberal Democrats.

 

The government chose not to implement the new methodology and, instead, imposed a 35% increase in housing requirement on the top 20 urban areas in the Country. The rationale behind this, seemingly arbitrary increase, has never been adequately explained yet it has significant implications for housing delivery in those urban areas, particularly London, as explained below.

 

The government’s planning white paper – Planning for the Future – suggests that the government will revisit the standard methodology in order to centrally determine the amount of housing each local planning authority will need to plan for in future development plans.

 

It is considered by the HBF that a standard methodology for calculating housing needs and requirements is necessary. The evidence since the NPPF in 2012 allowed local authorities to justify their own housing requirement has resulted in extremely poor planning and delivery of housing in many areas of the Country, but specifically, in the South East of England. The latest analysis by Lichfields of planned housing provision and delivery illustrate this failure very graphically.

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This clear regional disparity in planning for housing delivery is exacerbated by the impact of London and the failure of the capital’s leaders to cooperate with the surrounding shire counties over unmet housing needs. London has, until the introduction of the NPPF, planned for housing on a capacity-based approach rather than a needs-based approach. This led, in the past, to the wider South East being required to meet the unmet needs of the Capital in its own housing provision. However, under the 2012 NPPF, with every LPA being asked to calculate its own housing needs and then make provision for those needs (referred to as “consuming their own smoke”), the unmet needs of London have not been addressed. Indeed, the latest increase in London’s housing requirement of 35% is highly unlikely to be met, resulting in a huge shortfall of housing delivery when measured against requirement. This pattern of under provision and a failure to meet unmet needs around urban areas is reflected in many large urban areas and is exacerbated by the latest government methodology of imposing a 35% uplift on what were, already, challenging figures for many urban areas.

 

Since the publication of the NPPF in 2012, local planning authorities have been required to demonstrate a five-year supply of land for housing. In essence, this is a forward-looking measure, or trajectory, that seeks to ensure enough land is identified through the planning system to allow delivery of the housing to meet the identified housing requirement. The policy requirement is clearly set out within the NPPF itself with failure to meet the requirement resulting in the application of a presumption in favour of sustainable development. This internal sanction has been vital in ensuring that local planning authorities meet their housing requirement through the planning system. Failure to do so leaves them open to losing planning appeals and the ability to shape their own areas through the planning system.

 

The government’s proposed changes to the planning system suggests that, under the new approach to development plans there will no longer be a need for this approach. HBF is sceptical that the new system will actually deliver more land for housing and believes that this forward-looking approach to ensuring future delivery of land for housing through a five-year supply requirement should remain as a critical tool in ensuring the identification of land for housing.

 

The third element that central government should continue to monitor is the actual delivery of housing measured against the housing requirement. The government publishes an annual housing delivery test and we believe this is a vital part of the planning for housing process.

 

Unfortunately, once again, it appears to be the South East of England that has failed to secure delivery of enough houses to meet requirements. The latest test results, published in January 2021 are demonstrated below (Note: areas in red fall below 75% delivery against target in which the presumption in favour of sustainable development should apply, Amber areas are those that delivered between 75 and 85% and should apply an increased buffer in their land supply. Blue areas are those delivering between 85 and 95% who must publish an action plan):

 

However, despite the fact that 55 local planning authorities have fallen below the threshold at which they must now apply a presumption in favour of sustainable development to all applications for residential development, the government appears to have done nothing to ensure that this sanction is being applied.

 

The relationship between central and local government could be improved through direct resourcing based on housing delivery and planning. Previous grant funding such as the housing delivery grant, did see significant changes in attitudes towards both planning for housing and ensuring housing delivery.

 

11. What are the main opportunities and areas of innovation for meeting the UK’s housing demand?

The success of Government backed finance schemes in increasing housing supply has been proven in recent years with the Help to Buy Equity Loan Scheme. The scheme supported over 300,000 house purchases, with first time buyers making up 82% of these. The impact of reducing the risk of planning and development for home builders through improved visibility of effective demand, has led to a sustained period of record investment in land and labour for future housing delivery, therefore increasing supply. With the Equity Loan Scheme now closed, and the replacement scheme more restrictive, there is an opportunity for a new, innovative scheme to be developed.

 

With climate change and the natural environment set to dominate all areas of policy, including housing policy, over the coming years, major changes to the way homebuilders work will need to be made. As the industry transitions to the new regulations, this also provides opportunities for the UK to better meet consumer demand. New build homes offer benefits with regard to running costs and are built to a standard that is more attractive to an increasingly environmentally conscious consumer base. The incoming changes of the Future Homes Standard will improve this further still. In addition, as new regulations come in, new build homes can have the changes incorporated at the point of construction, as compared to owners of existing dwellings who will have to pay for retrofitting and other upgrades. By including these elements, homebuilders are creating demand for new build homes which in turn improves housing supply.

 

Modern Methods of Construction (MMC) also offer opportunities for policymakers and homebuilders, as they can be used to increase housing supply at a quicker pace whilst maintaining a high quality. Large parts of the industry are already committed to using MMC. Some of our larger members have begun to invest in their own factories and we are seeing an increasing number of partnerships with companies offering innovative solutions across the supply chain. Going forward, and to ensure that MMC is accessible to developers of all sizes, it is important that the Government continues to acknowledge and harness the benefits that MMC can offer and ensure that investments are made that reflect the changing practices of the sector.

 

September 2021

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