‘Fixer’ Gove will struggle to hit homebuilding targets – warning

The Government’s target of constructing 300,000 new homes annually by 2025 has been called into question due to a lack of confidence among builders and developers

Housing Secretary Michael Gove reiterated the Government’s long-held but often missed 300,000 annual homebuilding commitment last weekend but property commentators have highlighted several stumbling blocks.

Jonathan Rolande, a spokesman for the National Association of Property Buyers, suggested Gove has little chance of succeeding due to a “perfect storm” that is battering the housing market from all angles. 

He said: “The confidence of housebuilders is low, and we have serious inflation to deal with. Add in fact the cost of building materials is rocketing, price of bricks are up 12%, steel is up 50%, concrete has gone up 37% then it’s a nightmare scenario. 

“Skilled labour is in short supply too and, since leaving the EU, it is now more difficult to ‘import’ it as needed. If borrowing money is a solution, that has also just become a lot more expensive.

“Gove is widely seen as a fixer, somebody who can get things done. But even he will struggle with the perfect storm that is battering the housing and new-build market.”

Rolande, co-founder of property firm House Buy Fast, said it is all very well having a 300,000 target but who will build them?

He added: “I expect housebuilders to now focus only on developments where resales can be counted on and prices are less likely to drop during construction. 

“This is likely to be prime property that will appeal to investment funds and overseas buyers. The volume of affordable and family housing built is very likely to reduce whatever the target set.

“Simply having a target, whilst useful, is not going to solve the housing crisis. We seem to have lurched from a period of prosperity to one of retraction within just a few months. It is a great pity that for the many years there was money to spend, the Government did not take the long-term view and embark on a homebuilding programme itself.”

These concerns were echoed by Jason Tema, director of Clearview Developments, who said: “As the construction sector is facing a chronic shortage of qualified staff, labour costs are going up and, inevitably, are handed down to the buyer.”

“The construction industry has seen many SME developers go into liquidation since the pandemic but the current economic uncertainty is adding further challenges. With experts predicting that house prices will continue to fall, many house builders who were already only breaking even, might now be facing losses on their projects that their business might not be able to absorb.”