As we look forward (in both senses of that expression) to 2018 the event that is most likely to shape our future is Brexit.
The uncertainty caused by the long-running Brexit negotiations seems to be felt more keenly in board rooms than in living rooms. Consumers are apparently largely unconcerned about what our changing relationship with the EU might mean. As long as that continues, the housing market will continue to grow from strength to strength – which can only be good for Larkfleet.
The new homes market will also benefit from the government’s focus on housing in the recent budget from Chancellor of the Exchequer Philip Hammond.
In particular, the news that most first-time buyers will not have to pay Stamp Duty will give a significant boost to the ability of young people to get onto the ‘housing ladder’ and thus help to stimulate the market overall.
Mr Hammond’s commitment to a total of at least £44 billion of capital funding, loans and guarantees to support the housing market over the next five years will also help. So, too, will the promise of new money for the Home Builders Fund for small and medium sized housebuilders and a £630 million ‘small sites’ fund to help the delivery of 40,000 homes.
We also welcome the government’s recent industrial strategy white paper. Larkfleet responded earlier in the year when the government asked for the views of industry on the draft strategy which it set out in a ‘green paper’.
We are delighted to see that many of the comments we made have been reflected in the final strategy. In particular, we welcome the focus on increasing productivity, the commitment to education and training in skills relevant to construction and other industries of the future, and the intention to increase the UK’s investment in research and development.
The selection of ‘clean growth’ low carbon technologies as one of four ‘grand challenges’ set out in the strategy is also welcome and very much in line with what we suggested to government.
When combined with some of the tax changes aimed at boosting housebuilding and construction that were announced in the budget, the industrial strategy is a significant move in the right direction.
But we were disappointed that some issues we raised in the consultation were not reflected in the strategy.
We are deeply concerned about the impact of Brexit on the construction industry’s ability to recruit overseas labour to fuel future growth. However, in its whole 250-plus pages the strategy mentions immigration only once – specifically in relation to researchers and scientists. This is good, but it does nothing for wider industry and commerce.
Interviewed live on BBC2 television during the channel’s coverage of the budget, I warned that Brexit was in danger of depriving the industry of the skilled workforce it needs to build new homes. Many EU nationals are leaving the UK and others are less willing to come.
Without action to tackle this issue we have doubts about the ability of the construction industry to meet the government’s target of building 300,000 new homes every year by the mid-2020s. However, the immediate future for the housing market looks good as long as consumer confidence holds up in the face of Brexit uncertainties.