The EU debate: what could it mean for housebuilders?

Published on by Douglas Johnson

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As we move into the New Year, it’s looking increasingly likely that voters will be asked whether they want to remain in the EU. One area where we can expect this to have an impact on debate is development – where the referendum is likely to deepen existing divides.

Critics of development frequently claim housebuilders are to blame for slow delivery of new housing. Lewes MP Maria Caulfield’s contribution to the debate on the Housing and Planning Bill is typical: ‘It is clear that changes need to be made to our approach to land banking and brownfield sites in order to ‘unlock’ land that could be used for development. The Sussex CPRE reports that recently two sites in Newhaven for example still lay fallow even though planning permission has been agreed.’

Analysis released recently by the RICS points to a different picture – labour and skills shortages are driving up costs and holding up completions. More than 60% of respondents to the RICS’ survey said that labour shortages represent a ‘significant impediment to growth’. This isn’t news – David Thomas, Chief Executive of Barratt Developments, has described the skills shortage as ‘the number one challenge for housebuilders’.

Given that our construction industry relies on EU migration to fill this gap, it’s no surprise that many housebuilders have concerns about a potential Brexit. Research by the CIOB suggests the proportion of people born outside of the UK working in construction rose by around 10% between 2001 and 2011 – and that measures to address the shortage of skills by training people in the UK will take time. Housebuilders have been vocal on this issue – last year Berkeley Group stated: ‘Berkeley considers it important that the UK continues to play a major role in, and operate as part of, the European Union.’

We shouldn’t expect these arguments to sway eurosceptics – who are in some cases the same people who’ve criticised developers for holding back delivery. Peterborough MP Stewart Jackson, author of a Ten Minute Rule Bill to vary conditions on free movement of labour within the EU, has also questioned when ‘large residential housing developers tend to blame “instability” and “uncertainty” in the planning system’ for a lack of completions. These views even feed into each other – UKIP has long blamed migration for putting pressure on housing.

With an ear to the ground at public consultations on developments across the country, we’re often the first to hear what people feel about issues of the day. As the EU debate hots up, we’re expecting a retrenchment of views - with arguments on the role of migrants in our society and job market feeding into prior views. With local elections around the corner, the EU debate could have an effect for developers for years to come.

For more on what Brexit might mean for your company and how we can help you prepare for the Referendum, please get in touch.

Douglas Johnson

Douglas Johnson about the author…

Douglas joined the planning and development team in the London office in 2013, where he works for clients large and small across sectors.

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