PM is 'clueless', suggests industry, as it urges collaboration
If Labour is counting on the votes of those in the construction and property finance industries come the next election, it may need to think again – and fast. A social media post by Prime Minister Keir Starmer on X - Twitter by any other name - has warned: “This is my message to house builders: get on with it. If you promise homes, you have to build them… we’re introducing penalties if you don’t build them fast enough.”
Starmer told his followers that large housing sites can take at least 14 years to build, meaning families and young people spend years deprived of homeownership. It may do little to boost the PM’s or his party’s shaky popularity - in the new build market, at least. What was intended as a mark of Starmer’s firm leadership, has gone down like a damp squib and attracted industry derision. It was timed with a government announcement about new mandatory housebuilding timeframes to be established before planning permissions are granted, with penalties for those who fail to deliver. Councils are also set to receive new powers to try to keep housebuilding on track.
The penalties mentioned by Starmer are expected to be worth thousands of pounds per unbuilt home. Those found ‘sitting on vital land’ or those who secure planning permissions simply to trade land speculatively may see councils acquiring the site, where there is a case in the public interest, and could even be stripped of future planning permissions. New rules require that large sites of over 2,000 homes must be mixed tenure, meaning at least more than 40% of homes have to be affordable. It’s understood that the provision of cheaper homes can nearly double build-speed.
Gary Clarke (pictured left), new build account manager at The Mortgage Store, identifies Starmer’s approach as more ‘stick’ than ‘carrot’, and he is not convinced that it is the right way to approach builders. “While there have to be consequences for developers sitting on undeveloped land banks, or withholding from the market for logistical reasons, the Prime Minister may be better off adopting a more collaborative approach to understand why this is happening and how red tape can be eased to better incentivise house builders of all sizes to ‘get on with it’.”
This, Clarke suggests, should involve speaking with those who have expert knowledge to share. “The builders know the issues,” he said. “Let them tell you and work with them to problem solve, instead of grandstanding to try and make it seem like it's someone else's problem. After all, nobody forced Labour to include a promise in their manifesto. I applaud them trying to move things on, but I'd also be looking to set up a cross-party, long term housing mission or department, that takes housing somewhat out of the political process and provides a long-term vision and plan for the future of Britain's housing. That could be a longer-lasting legacy than any achievements in the next few years.”
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How aware is the Prime Minister?
James Farge (pictured centre), sales director at Catalyst Property Finance – which provides specialist solutions such as development exit and commercial bridging loans – has over 15 years of experience working on global projects for a range of private and corporate clients. “Keir Starmer hasn’t got a clue,” Farge said. “Nor does his government. Try following your own advice, Keir. You claim planning is now streamlined - it’s not.”
Farge points out that developers are actually dealing with endless planning delays, understaffed councils, conflicting local versus national policy and local plans which haven’t been updated. He also believes that ‘nimbyism; is blocking housing, that the country is lacking a replacement for Help to Buy, and Stamp Duty changes are choking sales.” There is also zero real support for SME developers, he claims. “You clearly have no idea what’s happening on the ground,” Farge told Starmer. “The planning system is broken, sales are flatlining, first-time buyers are locked out, and your reforms are just noise. Get out of Westminster, visit real sites, speak to real developers - not just the PLCs - and bring forward meaningful legislation that actually delivers.”
Farge went further and told Tom Hayes, his local MP, for Bournemouth East: “Your leader is so far out of touch it’s beyond. I am happy to bring together local developers, planning consultants, architects, lawyers, finance brokers etc to discuss this with you so you can take feedback to the Prime Minster. It’s time the government started to listen rather chucking out divisive rhetoric.”
Meanwhile, property developer Dave Forde (pictured right), who is a chartered construction manager at Kane Group, responded: “What should be of more concern to people, and in particular those involved in construction, is how obviously inept this government is. Let’s start with the plan for building 1.5 million homes in five years. Everyone knows this is not achievable, so why do we bother discussing it?
“It would appear that the members of Government have less knowledge about the construction industry then the average 16-year-old apprentice on site. When it comes to property development and house building they seem to understand this even less then the wider construction industry. It’s a simple matter of supply and demand. There is not a sufficient number of resources around to triple output. So, if you want to build three times the amount of houses, you need to increase the workforce and supply of materials by the same ratio. This will lead to higher build costs so less profit for anyone building houses. It will also flood the market and reduce house prices. Now that might sound great if you are struggling to buy a house, but it doesn’t really incentivise housebuilders to increase output.”
Forde suggests that the Government has made it clear that it is going to tax many heavily. “Every housebuilder knows that if they increase production and make profits, the Government are going to hammer them with punitive taxes,” he added.
In addition, Forde points to the Government’s focus on Net Zero, which – he believes – will add massive additional costs to building new homes. Wage rates in the construction industry have not really moved much in the last 20 years, he emphasises, while taxes and inflation have continued rising. “What is the incentive for anyone to work in construction, or to come here from abroad, or for people to build more houses?” he said. “Just more sound bite politics from a Prime Minister and Government who don’t appear to have a clue how to run a country or economy.”
