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Housing needs 120,000 extra workers to meet new homes demand

The housing industry needs 120,000 extra workers to build the amount of new homes the country needs, according to new research by EC Harris. And the labour shortage could push the industry to adopt new methods of housebuilding.

Current home construction figures stand at 140, 000 a year. That needs to be ramped up by another 80,000 to even start to deal with the shortfall in accommodation for the growing number of UK families said the “People and money – fundamental to unlocking the UK housing crisis” report.

The EC Harris labour shortage numbers are based on historic assumptions that it takes 1.5 full time workers to construct one dwelling. The sector is competing for labour in a construction market that is estimated to be short of 1M workers overall by 2020.

“Migration is a fraught political issue in the UK, but for many years it has been the most effective short-term fix for the UK’s construction labour shortages. Inward migration may be the only practical way to get Britain building in the short-term - even though it takes away the immediate pressure to put in place long-term training and skills development programmes.”

“Labour availability can be expected to be the biggest constraint on expansion over the next five years,” EC Harris said.

The report said that the solution to the housing challenge lies in creating the right conditions to invest in people and production innovation. Manufactured housing options such as timber frame or precast panels can cut the labour demand by 25% it said.

““This is now about the need for fresh, radical thinking from both industry and government, which respects the existing housebuilding model but also seeks out viable routes to large-scale, additional delivery,” said head of development at EC Harris Mark Farmer. “This means connecting long term money to income-led housing investment opportunities spanning multiple economic and political cycles. This in turn starts to create the right investment climate for industrialised production and skills development that will overcome the existing labour constraints affecting traditional, site based delivery.”

EC Harris suggested that short term solutions to the housing labour crisis could include recruiting from the manufacturing sector where employment is shrinking as productivity rises. And recruiting some of the 24,000 former soldiers leaving the armed forces each year.

Training new entrants from scratch is in the doldrums,  the report said. Construction overall attracted fewer than 20,000 first year trainees in 2013 – 5% of the number needed to meet the 1M worker target. “As a result, ramping up existing training provision from its current low point will take time. New trainers will need to be recruited - taking away capacity from the front-line, which will be difficult and expensive,” the report said.

“Migrant labour is likely to be one of the best options for extra manpower,” EC Harris said. “Migration is a fraught political issue in the UK, but for many years it has been the most effective short-term fix for the UK’s construction labour shortages. Inward migration may be the only practical way to get Britain building in the short-term - even though it takes away the immediate pressure to put in place long-term training and skills development programmes.”

The consultant estimates that construction’s migrant workforce currently stands at 10.6% of the total 2.376M workforce, up from 5% in 2001.

 

Housing issues at a glance

36 Average age of UK first time buyer

1.7M Number of people on affordable housing list

18% Share of housing provided by private rental

50% Typical earnings consumed by rent

£24bn Cost of housing benefit (rising by £1.7M a day)

 

See also Migrant labour vital to construction but can’t be a substitute for training, says CIOB

Mark Farmer will be chairing a panel discussion at the London Real Estate Forum at 11.30am on Thursday 11 June entitled  “Housing: Creating the Capacity to Unlock Supply”. Please visit http://www.lref.co.uk/housing-creating-the-capacity-to-unlock-supply for further information or to register your attendance.

If you would like to contact Jackie Whitelaw about this, or any other story, please email jackie.whitelaw@infrastructure-intelligence.com.