John Adams, partner at Deloitte Real Estate, discusses the growing challenge to support housing delivery across the UK amid an evolving housing market.
At MIPIM we hosted events with Cities ranging from Belfast to Berlin, from Manchester to Stockholm and Barcelona.
It was clear that housing delivery is a challenge shared by all cities across Europe.
In the UK the debate tends to be loudest around planning policy. This tends to over shadow other themes. Whilst at MIPM I talked about four of these themes, namely:
- skills and talent;
- the role of the employer; and
- the need for Place-based Partnerships.
Skills and Talent
Sir Oliver Letwin’s recently published preliminary findings into the build out of planning permissions identified a number of constraints holding back housing delivery including a limited supply of labour, building materials and capital, amongst others. As a generation of about 200,000 skilled workers approaches retirement, the number of new skilled entrants to the construction industry is not keeping up.
In that context innovation and applying new technology to speed up and make house building more efficient is required.
The construction industry currently spends around £200m on Research and Development, representing 0.9 per cent of total output – this is low compared to other sectors of the economy.
Modular housing is part of the solution. Companies such as Legal & General, Berkeley Homes are already investing in modular off-site factories, and others have introduced their own modular House types, Urban Splash, Pocket Living and Essential Living are all innovating with modular homes.
3D printing and robotics provides a digital technology that can transform the production of building components, and even build whole structures. Could it revolutionise house building in the same way it is predicted to transform production and assembly in other sectors, such as marine and automotive?
Rotterdam, for instance, is actively using 3D printing and applying it to construction and housebuilding with the help of start-up businesses to develop technology and partnerships with universities, young entrepreneurs and the construction industry.
The city has invested €100million in a platform for technology-led start-ups and has established a successful building technology hub. Start-ups are collaborating with students from the technical skills university, while the business university – Erasmus – is teaching entrepreneurial skills to start-up businesses to drive collaboration.
This support for innovation in housebuilding, applying digital technologies, and focus on start-ups and entrepreneurs could be a vision of how the UK could create a vibrant and “smart” housebuilding sector, with more small and medium sized players using technology to achieve speed and efficiency.
Our strategy to grow the housebuilding sector needs to embrace digital technology, AI and robotics. We need to invest more in research and development of housebuilding technologies, and in the entrepreneurial skills required to grow the number of small and medium sized builders.
The Role of the Employer – Deloitte’s Experience
At Deloitte, we are involved in all aspects of housing delivery, setting strategies and driving viability for the transformation of whole neighbourhoods such as Old Oak Common, the Olympic Park, and Manchester Life.
As an employer of over 1,000 graduates in an increasingly international market for talent, we have a responsibility to find innovative solutions to removing barriers to good quality housing that is in the right location from the first day they start work having left University.
To this end, we surveyed 986 graduates based in our London offices to gain a better understanding of what factors drive graduates’ decisions to rent, the cost to our employees and what more we could do to support them.
For over 50 per cent of the respondents, the cost of renting equated to 40 per cent or more of their net salary. 72 per cent of respondents said they would consider living with other Deloitte employees.
Using this insight, we created a pathway for our staff to secure better quality, more affordable purpose designed and managed private accommodation. We launched a new partnership with Get Living London, to provide a bespoke, easy to follow Pathway for 100 graduates to accommodation at East Village.
While this is a promising start, we are seeking to scale up this commitment through new partnerships. We have already extended our partner network to TIPI in Wembley, and looking to deliver innovative solutions and help our people find good homes to live in.
Place based Partnerships – Platforms for Growth
It is not just about building homes, but about building communities, and creating strong local economies within them. If we forget that we will repeat the mistakes of the past.
We need more Place Based Platforms – linking housing to economic growth, linking tenures and types of housing to people. These platforms should be led by local authorities in partnership with Housing Associations, housebuilders, employers and Homes England.
It is not just about building homes but renewing and strengthening the capacity of communities to flourish, and residents can play their fullest contribution to the economic success of their areas.
To be self-sustaining, communities must be balanced and neighbourhoods must be attractive so that people choose to live in them. This is about place-shaping.
It is also about linking housing to growth and linking tenures and housing types to people.
Only local authorities working with communities can deliver this place leadership role working with the full range of housing providers, house builders, employers and Homes England.