Cautious Optimism and Chain Reactions
The latest Home Builders Federation survey indicates cautious optimism, with many small and medium sized developers expecting to increase delivery of new housing delivery in coming months.
This very much reflects our experience at Scotts Timber Engineering, where we have been seeing steady and consistent growth from the SME housebuilder segment of our customer base over recent months as well as growth in our timber frame operation.
While it’s great to see the more optimistic approach, it’s worth noting that this isn’t universal, only reflecting 41% of those surveyed. And a good opportunity to remind our Secretary of State for Housing Steve Reed and Housing Minister Matthew Pennycook that the same old issues are still holding the sector back.
We need someone to start an economic chain reaction.
The biggest single driver of the caution holding builders back is low buyer confidence at 63%, followed by housing market conditions at 61%, with affordability coming in third. I guess that’s what happens when both business and personal tax burdens rise dramatically – if you’re not sure whether your employer can afford to keep you, and your family finances are stretched, you’re more likely to sit tight than to start thinking about buying a new home!
Realistically, as the cost of living starts to soar in the face of oil and other key shortages, petrol and power price rises, inflation will start rising again, and recent falls in interest rates will be reversed. Once again, more pressure will be felt by the UK’s beleaguered builders and their supply chain.
So yes, once again, it’s the economy. If anyone out these in Government is listening, talk to the SMEs that are the economic backbone of Britain about kicking off the chain reaction that would help turn that cautious optimism into a building bonanza that would benefit the entire economy.
HM Government, if anyone’s listening out there, any of these would start a chain reaction that would improve the housebuilding market and its knock-on benefits to the wider economy, starting to replace the doom loop with a virtuous circle of growth and prosperity.
- Stop the punitive tax rises on business that are leaving SMEs around the country with no choice but to cut staff. Job security and the ability to pay your bills every month are key factors in economic confidence
- Put in place a first time buyer incentive programme to get the market moving from the bottom up.
- Cancel the mansion tax and get the market moving from the top down.
- Reverse the changes to minimum wage that make it uneconomic to employ the young people our industry needs.
And while you’re about it, while we know there’s not much you can do about oil prices in the current crisis, you could stop taking advantage with huge increases in tax and VAT every time we will up our cars, trucks and plant, decimating consumer and business cashflow still further!
James Scott
MD
Sources: https://www.hbf.co.uk/policy/campaigns-and-initiatives/sme-sentiment-survey/
