Research article

Brexit fears building

Britain’s withdrawal from the European Union won’t materially affect demand for affordable housing. But 94% of respondents believe it will reduce capacity in the construction industry

While the uncertainty of Brexit hangs over the UK housing market, our capacity survey shows that it barely registers as a barrier to building more affordable homes; only 4% of organisations put it in their top three.

On the demand side, most capacity survey respondents feel that affordable housing need will remain largely unchanged, and the focus groups agree.

Some acknowledge that many of their shared-ownership buyers are Eastern European. While some of these sales fell through in the immediate wake of the Brexit vote, most returned to complete their purchase once the dust had settled.

By contrast, our survey respondents recognise that the impact on construction capacity will be overwhelmingly negative. This is in line with the wider construction industry’s views. The HBF Workforce Census 2017 recorded that 18% of the home building workforce is from EU countries. For London sites, the figure is 50%.

Our focus groups report that the cost of construction materials has already been impacted and some local contractors are very stretched. Brexit is unlikely to help matters. The ageing construction workforce and a general lack of skills are more fundamental problems.

Modern methods of construction are often cited as a potential solution to capacity issues, with Swan and Accord at the forefront in already having their own facilities.

One focus group attendee explained that their organisation is seeking to work in partnership with three or four neighbours to set up a local offsite manufacturing facility and secure their future development capacity. However, this is too big a commitment for most small- or medium-sized providers alone. This is yet another example of how the housing sector is having to respond to a changing political and economic environment.

Figure 6

FIGURE 6 | To what extent do you think Brexit will impact on the following issues? Although the impact on affordable housing need is low, the impact of Brexit on construction is overwhelmingly negative
Source: Capacity survey

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