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.
Wed 02 October, 2024
Introduction
In this Parliamentary Newsletter, we update you on work to progress the many ongoing and new challenges affecting the home building industry in Wales, including an overview of the Home Builders Federation’s (HBF) new reports and campaigns.
We hope you find the information useful but if you have any questions or would like to discuss the opportunities and challenges facing the home building industry in more detail, please contact Laurence Thompson, Policy and Campaigns Officer, at laurence.thompson@hbf.co.uk.
About HBF
Help to Buy Wales scheme has generated returns of around £40 million for taxpayers and supported 14,000 households
New research by HBF shows that the Welsh Government’s Help to Buy Wales equity loan scheme has supported over 14,000 households to buy a home in the decade since it began operating, more than three quarters of whom were first-time buyers, and has generated over £40 million for the Welsh Government.
The scheme has now been in operation for ten years, but a decision by the Welsh Government on the future of the scheme after March 2025 is imminent. The new report, ‘Securing Futures: The Success and Impact of Help to Buy Wales’, reveals that the scheme has seen homeowners repay their Welsh Government equity loans with an average uplift of 18% when compared to the original loan value. The return is expected to rise further as more homeowners pay back their loans to the Welsh Government in the years to come.
The research, conducted by the Home Builders Federation (HBF), also reveals that:
- Help to Buy Wales has provided support to lower- and middle-income households; 64% of households had an overall income of £40,000 or less, while the majority of households who have used the scheme bought a house under £200,000.
- On average, every year the scheme has led to investments of £39.3 million in affordable housing, supported 4,400 jobs and generated £240 million in economic activity.
- 78% of the Welsh public agree that a Government scheme to help first-time buyers should be in place.
Our new research follows a Welsh Government evaluation of the scheme published earlier this year which found that the scheme has successfully targeted support to first-time buyers and smaller home builders in Wales.
Read the ‘Securing Futures: The Success and Impact of Help to Buy Wales’ report on the HBF website.
2023/24 had the second lowest number of new home completions on record
New figures from the Welsh Government show that 2023/24 had the second lowest number of new housing completions on record.
4,756 new dwellings were built in the 2023/24 financial year - 49% below the 2006/07 peak, and 18% down from 2022/23. Only 2020/21, at the height of the Covid pandemic, saw lower levels of housing delivery.
Meanwhile, the number of residential units given planning permission approval in Wales in the 12 months to June 2024 was 18% lower than in the previous 12-month period – falling from 8,543 to 7,001. HBF’s latest Housing Pipeline report also shows that the number of projects approved was also down 16% in the second quarter of 2024 compared to the same period a year ago (from 136 to 114). Planning permission approvals are a lead indicator of future housing supply.
The sharp decline in housing completions and planning permission approvals comes amid a period of high interest rates which have limited mortgage availability and weakened demand, alongside slow progress in updating Local Development Plans (LDPs) in Wales.
As an industry, we are committed to working with Members of the Senedd and the Welsh Government to overcome the challenges facing home builders.
11 out of 25 Local Development Plans are now time-expired
Despite the nosedive in housing completions and planning permission approvals across Wales, 11 out of 25 Local Development Plans (LDPs) are now time-expired and a review is required for a further 8 LDPs.
LDPs set out each local planning authority’s proposals for future development and the use of land in their area. They cover a period of around fifteen years and are meant to be replaced once time-expired. They must also be reviewed every four years.
However, slow progress in updating and reviewing LDPs is now having a significant impact on housing supply of all tenures, as delays in updating LDPs create uncertainty for the industry and lead to unviable and out-of-date allocations, making it hard to plan future development.
In an insight piece, Home Builders Federation’s Planning and Policy Advisor for Wales, Mark Harris, has outlined a number of interventions that can be taken to speed up the production of LDPs. These include investment in staffing and resources for Local Planning Authorities, introducing an all-Wales Government housing target for market delivery, and further monitoring and enforcement of plan production by the Welsh Government.
Audit Wales report calls on Welsh Government to increase capacity in local planning authorities
Audit Wales – the official auditor of the Welsh public sector – has called on the Welsh Government to increase capacity in local planning authorities (LPAs).
In a new report examining whether the Welsh Government is making good use of its resources to deliver its social homes target and associated benefits, Audit Wales says that ‘the Welsh Government should work with local government partners to develop sustainable solutions to the capacity and delivery constraints in local government planning services.’
HBF has been highlighting this issue for some time, with a lack of staff and resources in LPAs causing errors and administrative discrepancies in the planning process, leading to delays in the delivery of homes of all tenures. In real terms, local authorities’ net planning expenditure has fallen by 50% since 2008-09, and the average time taken to determine planning applications is now above Welsh Government targets.
The report also highlights the central role of the private home building industry in meeting the Welsh Government’s 20,000 social homes target. The industry delivered 42% of all new affordable homes in the first two years of this Senedd term via Section 106 agreements, and this contribution has increased year-on-year.
HBF’s evidence to the Senedd Local Government and Housing Committee consultation into social housing supply earlier this year provides more detail on industry’s contribution to affordable housing delivery. Our written submission can be found here.
New figures show the home building industry contributed £182 million towards affordable housing in 2023/24
A new report from HBF demonstrates that house building activity provides a range of socioeconomic benefits to local communities in Wales.
The figures from planning and development consultancy Lichfields show that, in 2023/24, the home building industry in Wales is estimated to have contributed £182 million towards affordable housing and £13m towards spending on new and improved schools.
The industry’s activity in 2023/24 in Wales has also:
- Generated £1bn in economic activity and supported 17,000 jobs
- Generated £127m in tax and £10m in council tax.
- Enabled £135m of spending in local shops.
- Led to a £329m spend on industry suppliers.
However, with levels of house building expected to drop this year overall, these benefits to local communities are now under threat.
Read the Economic Footprint of Home Building report on the HBF website.
Industry holds Equality, Diversity and Inclusion (EDI) conference as fifth cohort of the Women Into Home Building programme launches
More than 70 of the home building industry’s HR talent leaders and diversity and inclusion advocates came together for the Home Builders Federation (HBF) inaugural Equality, Diversity and Inclusion (EDI) Conference, which took place on Wednesday 19 June.
Chaired by Sophie Turner, Founder of #YesSheCan, the conference discussed creating more inclusive work cultures and shared learnings from other sectors.
Neil Jefferson, Chief Executive at HBF, opened the conference by emphasising the importance of sharing knowledge across the industry to drive positive progress.
Meanwhile, HBF has recently launched the fifth cohort of its Women into Home Building programme to attract more women into site management careers. The programme is being delivered in partnership with 10 home builders to offer more than 30 training, support and work placements.
Currently, women account for just 16% of the construction workforce and 4% of existing site managers in the home building industry. With the industry facing a major skills shortage, the programme aims to address the constraints of the current talent pipeline and the gender imbalance in the workforce.
Energy efficiency data shows new build homes emit 61% less carbon a year than older properties
The home building industry is adapting at pace to support net zero targets and deliver increasingly energy- and thermal-efficient homes.
HBF’s latest calculations based on EPC registrations data from across England and Wales shows that:
- New build homes emit 61% less carbon a year than existing properties
- The average new build home is powered by 57% less energy, cutting energy bills by up to £183 a month.
- This is an annual saving of over £2,200 on new build houses.
- New build homes are increasingly more energy efficient. Less than 5% of existing older properties achieve an A or B Energy Performance Certificate rating (EPC), compared to 85% for new builds.
