HBF Parliamentary Newsletter - January 2024

The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. Our members are responsible for providing around 80% of all new private homes built in England and Wales, and are mostly small or medium-sized enterprises.

HBF will host its annual Skills Parliamentary Reception between 2-4pm on 24 March 2025 (exact time to be confirmed) in the Churchill Room at the Houses of Parliament. The event has been sponsored by Labour MP Lauren Edwards, Chair of the All-Party Parliamentary Group for Skills, Careers and Employment.

The reception will provide an opportunity for you to meet apprentices, graduates, trainees and other new industry entrants and will showcase the variety of career paths and opportunities available in the home building industry.

With skills a key priority for the Government, the event will also demonstrate the work the industry is doing to attract new entrants into the sector and the steps that need to be taken if we are to develop the necessary talent pipeline to deliver 1.5 million new homes over the parliamentary term.

If you are interested in attending, please contact Emma Ramell at emma.ramell@hbf.co.uk.

The latest annual statistics from the Ministry of Housing, Communities and Local Government (MHCLG), released in November, show that 221,000 net additional dwellings were delivered in 2023-24 - down 6% on 2022-23.

This includes 199,000 new build completions, down 7% from last year and 9% below the peak in 2019-20.

The figures underline the significant challenge to reach the Government’s housing targets, with wider indicators such as planning permission approvals suggesting further falls in supply are still to come. HBF’s latest Housing Pipeline report shows that just 2,260 sites were approved in the third quarter of 2024 (the latest quarter for which data is available) - the lowest quarterly total recorded since the HBF reporting in 2006 and a 10% decline from the previous quarter.

Therefore, while recent government announcements such as the updated National Planning Policy Framework have been encouraging, swift action is still required to address broader issues such as financing for homebuyers and a lack of providers in the market to take on the affordable housing developers build.

View the latest Housing Pipeline report on the HBF website.

The delivery of at least 17,400 affordable housing units with detailed planning permission has ground to a halt as the lack of Registered Providers (RPs) participating in the market threatens supply, new HBF research reveals.

Local Authorities require a percentage of homes on each site to be affordable, and these homes are then purchased at a reduced price by an RP. Around 44% of all new Affordable Homes are now delivered by the private sector through this model.

However, recent years have seen a gradual reduction in the number of RPs actively bidding for Section 106 Affordable Homes due to a ‘perfect storm’ of economic and policy challenges facing the affordable housing sector. As a result, at least 139 home building sites are currently delayed due to uncontracted Section 106 units, forcing developers to re-evaluate the pace and direction of their building programmes.

HBF is calling for the Government to issue a Written Ministerial Statement (WMS) encouraging a greater acceptance of cascade agreements by Local Planning Authorities (LPAs). In the short-term, this solution is the one that will be of most practical help to developers as it will ensure homes can continue to be built and give reassurance to the developer that if an RP cannot be found, the Affordable Homes can be changed to an alternative tenure or a payment made to the LPA in lieu of the Affordable Housing as last resort

Longer term, we would like to see further action taken to rebuild the financial capacity of the RP sector so that they have the confidence and capability to invest in new housing.

For more on this issue, read the Bid Farewell report on the HBF website.

The annual SME State of Play report, conducted by HBF, Close Brothers Property Finance and Travis Perkins, details the findings of one of the most comprehensive surveys of Small and Medium Enterprise (SME) housebuilders.

The 2024 report, released in December, shows that planning continues to be the most significant barrier to delivery, with delays and local authority resourcing considered to be key contributors.

The report details several growing challenges holding back SME home builders:

• Local and/or political opposition to new development is seen as a major barrier by three-quarters (78%) of respondents, up from 69% in the last report.
• 80% of respondents identified obtaining suitable offers for Section 106 Affordable Homes to be a barrier to growth.
• 56% of SME home builders report an uplift of at least 30% in the cost of obtaining planning permission over the last three years.

For more on the findings and HBF’s recommendations to support SME home builders, read the SME State of Play report on the HBF website.

Home building in England and Wales generated over £50 billion in economic activity and supported around 785,000 jobs last year, HBF research shows.

The Economic Footprint of Home Building in England and Wales report carried out by Lichfields for HBF shows that, in 2023/24, the 221,000 homes built:

• Supported over 9,500 graduate and apprentice positions.
• Generated £1.4bn for infrastructure including £637m for new and improved schools.
• Led to investments of £10.2bn in affordable housing.
• Generated £6bn in tax and £455m in council tax.

The report, produced in association with United Trust Bank, illustrates how delivering the Government’s housing target of 1.5 million homes will boost economic growth and increase investment in local communities.

Read the Economic Footprint of Home Building report on the HBF website.

New research by HBF estimates that local authorities in England and Wales are sitting on over £8 billion of infrastructure payments made by developers, including over £6bn from Section 106 agreements and almost £2bn raised through the Community Infrastructure Levy (CIL).

The research is based on a Freedom of Information (FOI) survey which received responses from 208 local authorities. The responses show that, on average, councils hold £19 million in unspent Section 106 infrastructure contributions - at a time when the Government is short of money to invest in infrastructure as it searches for much-needed economic growth.

Developer contributions are paid to the local authority to fund affordable housing, infrastructure and amenities to improve the local area for new and existing communities, as part of the process of granting planning permission. However, this research shows that large sums are being held for extended periods of time due to insufficient financial and staffing capacity within local authorities, as well as ineffective monitoring of funds.

Read the unspent developer contributions report on the HBF website.

New analysis of the performance of the Help to Buy scheme by HBF, including loan redemptions, reveals that the initiative, introduced in 2013 to support households onto the housing ladder, has already delivered a positive return on investment for the Exchequer of more than £900 million from the first 40% of loans that have been fully paid back by homeowners and interest payments to date.

Using government data, the new report, Road to Redemption, found that across 154,275 fully repaid loans, the Government had received an uplift on the original loan value of around 9%, representing a ‘profit’ of £718 million with a further £229m in interest income to date.

The research also considers the positive impact that the scheme had on housing supply, while testing the claims made by some commentators that it led to house price inflation.

HBF has called on the Government to build on its excellent early work in fixing the broken planning system by supporting prospective first-time buyers to access mortgage products that enable them to buy a new, energy-efficient home.

Read the Road to Redemption report on the HBF website.

New Homes Week 2025 will take place from Monday 3 to Sunday 9 February. The campaign is delivered annually by HBF to celebrate the benefits of new build homes and to provide a positive platform for the home building industry, new build homeowners and potential home buyers.

The theme for this year’s campaign is ‘Community’, championing the investment and social and economic benefits new homes bring to their local area. If you would be interested in visiting the community facilities on a development in your constituency to mark this year’s New Homes Week, get in touch with Laurence Thompson, Policy and Campaigns Officer at laurence.thompson@hbf.co.uk.