The media has never been shy when it comes to reporting on the problems professions like teachers, police officers, nurses and fire fighters face when it comes to covering the cost of living in the UK’s cities and in London in particular despite the vital role each plays in our own lives.
Recent reports however suggest that the property industry’s failure to build affordable homes is now starting to affect British business. There is a growing concern that businesses based in British cities’ are struggling to recruit and retain the staff they will need in order to continue to succeed.
This worrying trend has been highlighted by the CBI who are now beginning to publicly lobby for a dramatic shift in housebuilding policy
Last summer – and admittedly pre-Brexit - the UK’s government announced it had set itself a target of building 1m new homes by 2020. The CBI however is now warning the government that they are at risk of falling short of this goal, adding that their failure to meet the population’s demands for affordable housing is already hitting British companies’ recruitment drives. Moreover they are warning that their research suggests the fact more and more employees are forced to come to work via long commutes is now impacting on productivity.
“It’s a problem the impacts of which are seen every day” said Josh Hardie, deputy director-general of the CBI, “from high prices barring people moving home and deterring them from applying or staying in a job, to the dent it puts in productivity.”
Mr Hardie went onto urge the government that they need to implement “a quiet revolution” in the way that both they and industry “think about, provide and deliver housing if we are to reach the welcome target of one million new homes by 2020.”
The CBI does admit some efforts have been made, for example the recently announced Home Building Fund, but insisted that alternatives to the so-called “one size fits all” approach have to be found.
They have demanded greater flexibility for housing associations and more efforts to explore what types of new housing could be built on the ‘brownfield’ sites that are currently sitting unused within the green belt. The CBI are adamant that a more flexible approach – supported by a government prepared to walk closely with industry – will “enable us to deliver the homes we sorely need, and which will drive productivity, boost growth and increase prosperity in every corner of the country."
The CBI’s comments come hot on the heels of P-2-P lender Saving Stream’s figures showing that short-term loans to back construction are at lower levels than during the last recession. They claim only £67.4bn in short-term loans were issued to developers in 2015 compared to £68.2bn at the height of the recession in 2010/11. More worrying was their supporting comments that suggest that even when developers are taking advantage of the short-term bridging loans available to fund projects, the banks are taking up to three months to approve their funding, a delay that prompted one of Saving Stream’s directors, Liam Brooke, to say:
“The housing crisis has meant that investors need to secure opportunities for potential projects in a very tight timeframe, as competition can often be intense. There has been an influx of foreign cash buyers looking to invest in the UK property market, and for developers the speed of their investment can often be the make or break.”
Time will tell whether the plans Philip Hammond outlined in his Autumn Statement will ease the housing crisis.