Jonathan Rolande: Politicians are pledging a housebuilding revolution but who will build them?

Most weeks there are stories within the property sector that quietly slip under the radar - but which hold huge significance. 

Last Wednesday another one emerged via reports that Bellway, one of Britain’s biggest housebuilders, is expecting to complete a third fewer homes this financial year. 

One in three fewer homes….

The article was buried in the business sections of the newspapers, but the figures were incredibly stark. 

Bellway reported an 18% drop in underlying pre-tax profits to £533 million in the full year to July. This, they said, was due to lower volumes and a slimmer operating margin. Group revenues were down 3.7% to £3.4bnin 2023.

They’ve now told investors to expect a "material reduction in volume", with 7,500 completions in 2024.

This is about 8% below expectations and 31 per cent lower than the 10,945 achieved a year earlier.

What this story further exposes is that Britain’s housing supply crisis is only going to become more acute.

The property market is a subject we in the UK are all fascinated by. 

Housing is fundamental to our very survival but it is also so much more. 

It is a source of contentment – or discontent - and a barometer of the economy and the state of the nation. 

Inequality in housing exists because of inequalities elsewhere, in education, the tax and benefits system and the workplace. 

But for many, owning a home – or even the dream of it - is now entirely out of reach. 
 

With so many now forced to rent, demand has increased to the point where we often have 25 applicants for every rental property, fuelling rent increases as landlords price according to demand. 

Rising prices and rents stop many being able to live near work or their children’s school. And they add to living expenses for travel and creating pressure for pay rises to meet the new, increased costs. 

Tenants feel insecure in their home with many being no more than two months from eviction should the owner want to sell or rent to somebody else. 
Those able to buy are faced with high prices, high mortgage rates and a shortage of property.

Whatever your politics, it is clear that the current housing situation does not benefit anybody, perhaps apart from a very small number of people at the very top of the pile, and if left to its own devices, will not improve. 

And as Bellway’s warning underlines, things are very likely going to get worse quite soon.
The imbalance of supply and demand has caused the huge inflation in the sector.

Not long ago, an average London home was four times the average salary – that’s now fourteen times. Demand won’t reduce – people have the same desire to live somewhere, many more want smaller homes as people cohabit and have children later in life and on top of that pressure, the population is growing too.

Politicians are pledging a house building revolution to address this. But the big question has become just who will be building the hundreds of thousands of homes we need each year. 

It’s clear we cannot rely on housebuilders. As private companies they are rightly cautious and will only develop where they can be sure of sales and profits. 

Like Bellway, mega-builder Barratt says demand from buyers is down 49% and will no doubt scale back their building program.

With the government and councils sitting on vast amounts of land such as disused buildings, car parks, offices and open spaces, it's high time we look to cut out the middleman and let them build homes for local people who need them. 

With each passing week it is becoming more and more obvious developers will not build homes that will struggle to sell. 

As we move towards 2024, only prime sites will be started. 

Riskier sites will be mothballed. 

And, sadly, it is a trend I only expect to see continuing long into the future. 

Keir Starmer could well have the keys to Number 10 in a year’s time. 

But, like millions of others, may face a massive headache in finding the help he needs to make himself feel at home.

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