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Building targets might not be met as developers favour “buoyant” markets

London is falling out of favour with developers and builders as they seek better performing markets elsewhere, and the capital’s annual housebuilding target could be set to fall off track.

Theresa May wants the UK to be building 300,000 homes a year until the mid-2020s in order to ease pressure on the country’s housing market, and 66,000 of these are expected to be built in London.

However, Rob Perrins, boss of major developer Berkeley Homes, has warned that London Mayor Sadiq Khan is unlikely to meet his target unless things begin to change, as the number of new developments being started in the capital is currently 30% lower than what it was two years ago.

Perrins believes that a lack of available workforce is part of the problem, claiming the capital needs another 150,000 employees in the industry to have any hope of meeting the targets, while the slow planning system as well as weaker demand due to factors like high stamp duty rates are all leading developers to move away from London towards more favourable areas.

Shrinking workforce from the EU

According to the Berkeley leader, Brexit is also creating major issues in terms of workers. “It is a fact that over half of London’s site labour comes from the EU,” Perrins said.

“This needs to be addressed by a combination of continued access to EU labour, skills training and innovation in construction if the industry is to achieve its medium-term production aspirations.”

He also added that, despite the difficulties, the company remains committed to London. “It’s good for us in one way but bad for London in another way that a lot of the other developers and a lot of the smaller developers are not working in London any more.”

Elsewhere in the country, housing markets are by far outperforming the capital, and this is where many developers are now refocusing some of their efforts. In the north, the likes of Manchester and Leeds are seeing a rise in the number of new developments, while Birmingham and parts of the West Midlands have also been on the up compared to London and the south-east.

The post Building targets might not be met as developers favour “buoyant” markets appeared first on BuyAssociation.

Source: BuyAssociation

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