It felt as if half the built environment sector descended on Leeds this week for Yorkshire’s answer to MIPIM. Daniel Gayne was among those present to talk about housing, regulations and the impending general election
It was a wild and windy Wednesday in Leeds when the rumours began to spread among the UKREIIF conference delegates.
At first, nobody was quite sure how seriously to take them. The housing minister himself, in a Q&A with a housing association boss, seemed as surprised as everyone else.
“I have no idea where this came from,” Lee Rowley said, laughing: “It’s not what I am planning for and, if it does happen, I’ll be out leafleting in the rain in the constituency later.”
Across the afternoon’s panel sessions, many attendees appeared to be paying as much attention to the updates from their Twitter feeds as to the panellists in front of them. Then, shortly after 5pm, it was confirmed: There will be a general election – and soon.
Industry reacts to shock news of July election
On the ground in Leeds, there seemed to be agreement that the election cannot come soon enough.
Speaking outside an Opportunity London reception in the city centre on Wednesday night, Andy Cleevely, a partner at consultancy Ridge & Partners, said: “It kind of feels as though the market has been a little bit tentative, waiting for this to happen and to get some sort of definition around it. So I think it’s a positive thing.”
He said he expected the formation of a new government to see an upturn in the market. “It’s not a boom time at the moment and I think that’s partly because there is a lot of uncertainty in the market. I think the interest rates and inflation have had an impact on that. And so I think we need a bit of certainty.”
Will Poole, a partner at architectural practice Howells, echoed the statement. “It seems to have been well received as good news that there’s going to be some clear outcome sooner rather than later,” he said, adding that there had been “a stasis” for the past years as overlapping constraints on building costs had made the market stagnate.
I think you’d have to be in quite an isolated mindset to feel that [the election] is a balanced fight
Will Poole, partner, Howells
“Ultimately, it’s stability that will underpin confidence in the market and investment in the UK, and will also help the flow of new homes being built.”
Poole added that the election news had given UKREIIF attendees “a shot in the arm and it seems to have created a bit of a buzz”.
Asked if there was more warmth in the built environment towards Labour than the Conservatives, he said: “I think you’d have to be in quite an isolated mindset to feel that it is a balanced fight. I think that’s a question that probably answers itself.”
Of the issues that are set to dominate the election campaign, one architect to whom Building spoke that evening made it clear which would be the most salient within the built environment: “Housing, housing, housing.”
Labour sets out its plans for housing
Following the election news, Darren Jones, Labour’s shadow chief secretary to the Treasury, promptly pulled out of his keynote speech scheduled for Thursday morning, but Rishi Sunak’s announcement came late enough to allow delegates to hear shadow housing secretary Angela Rayner set out the opposition’s stall on the big topic of interest
Speaking on the first day of the conference, Rayner revealed Labour’s plan to establish an expert independent taskforce to choose sites for new towns, as well as proposals for a code to which developers must stick when bringing forward these new settlements. This included more social and affordable homes – with a target of 40% – as well as design that pays attention to local history and improved appropriate social infrastructure.
The rest of her speech was largely a summary of Labour’s previously announced commitments on housing, but Rayner did indicate that the party would make Affordable Homes Programme funding more flexible and hinted at further devolution to regional leaders.
Housebuilders will probably be frustrated at her defence of the party’s decision to block Conservative reforms to nutrient neutrality, which Rayner criticised as “half-baked”, while the build-to-rent sector will not be enthused by her promise to ban no-fault evictions – “no ifs, no buts”.
Conservative minister defends record and urges industry to temper expectations
On the Conservative side, the contrast was stark. Rowley’s Q&A with Fiona Fletcher-Smith, boss of L&Q, seemed largely to be an exercise in managing expectations within the sector.
Asked how the department could help address the interruption in housing supply while the sector waited for the spending review, Rowley said it was “looking more broadly with colleagues and Treasury about what may be possible”. But he warned leaders not to expect too much at the end of a spending review period.
“I hope you’ll appreciate that there is always a natural cycle towards the end of the spending review where there is this absolute eagerness to get clarity, but we have to allow that process to go through,” he said.
My big ask for any new government is to give us certainty on rent
Fiona Fletcher-Smith, chief executive, L&Q
“As much as I want to give you clarity about what’s coming in terms of affordable housing and all the other things that may or may not be available, so do my colleagues in health, so do my colleagues in education, so do my colleagues in welfare, so do my colleagues in pensions.”
While Rowley’s slightly gloomy outlook might not go down well on the campaign trail, it does illustrate some of the harsh realities that Labour could face if the party finds itself in power after July.
Housing leaders express frustration at building slowdown
There may be some within the housing sector who are feeling hopeful that a Labour government could spark a turnaround in their fortunes. Prior to the announcement of the election, Geeta Nanda, chief executive of Metropolitan Thames Valley, painted a rather bleak picture of capacity leaving the sector.
“There are contractors going bust, there are capacity capabilities that are leaving the sector and short term as well as longer term commitment are what we need to keep things going – that’s a real worry,” Nanda said.
Elsewhere in the conference, L&Q’s Fletcher-Smith set out her key demand for the next government. “My big ask for any new government is to give us certainty on rent,” she said. “I don’t even mind what the formula is – but if I can have certainty, I can plan”
In his own Q&A session on Wednesday, Tom Copley, London’s deputy mayor for housing, echoed this sentiment. “The long-term rent settlement is foundational,” he said. “If you’ve got certainty on that, it is the basis of being able to then plan.
“[Then] you have got the confidence of not having to build into your business plans an accounting for uncertainty to the extent that you might have had to over the last few years.”
Is stability the new sexy?
There was a sense across the conference that what many people want is boring, predictable, stability – and many will now be hoping for a general election result that delivers this.
Stephanie Hyde, JLL’s chief executive of markets advisory for the UK and EMEA, said on the first day: “I was talking to someone yesterday who said stability is the new sexy. I wouldn’t quite use those words, but I get what they mean.
“It is important that we have that clarity for business to know about investment. When capital was cheap, it was hard enough, but with interest rates the way they are that is increasingly important.”
Hyde also acknowledged that there was important work that would need to be done by the next government: “It’s not just planning […] but its energy and grid capacity – there’s so many more conservations going on there – and even some of the basics like water.
“Cambridge, one of the key areas for investment in the UK now, has a lot of things held up because the Environment Agency is saying there is not enough water. There needs to be a really detailed infrastructure plan to get it right.”
With every general election, there is a perception that its results will mean great change. But whoever is elected in July will, in many governmental departments, be inheriting pieces of policy developed over long periods of time by the civil service, which the party in charge may be reluctant to change.
We can’t carry on for the next 10 or 20 years with traditional construction as a service being the primary way in which we deliver projects […] because we are going to run out of people to do the onsite jobs
Fergus Harradence, deputy director for infrastructure, construction and rail at the Department for Business & Trade
There seems to be little expectation of change relating to the construction playbook, for instance. Speaking at a panel on this topic, Fergus Harradence, deputy director for infrastructure, construction and rail at the Department for Business & Trade, said: “I think the principles will largely remain the same because I think everyone agrees with the principles.”
Change in these areas of important – but not particularly sexy – civil service policymaking tends to be incremental, and so it will be for the playbook, according to Harradence.
“Those areas where the playbook is likely to change are going to be very focused on things like digitisation in industrialised construction methodologies,” he said
“Demographic change within society as a whole – but particularly within the construction workforce – is going to require us to make greater use of industrialised construction methodologies. We can’t carry on for the next 10 or 20 years with traditional construction as a service being the primary way in which we deliver projects […] because we are going to run out of people to do the onsite jobs.”
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