Our reaction to the recent government budget announcement…

The UK’s recent budget announcement featured billions in funding aimed at bolstering the housing market, demonstrating a significant commitment from the Labour government to expand affordable housing. Geoff Keal, CEO of TerraQuest, supports this ambition but emphasises that further steps are needed to make these goals a reality.

Geoff stated, “The budget highlighted the Labour Government’s continued commitment to building new, affordable houses across the country so that everyone has a place that they can call home, which we welcome whole-heartedly. However, in order to achieve the targets set out in the National Planning Policy Framework, the Chancellor needs to ensure the budget embraces digital transformation and tackles the industry’s biggest barriers – the construction skills crisis, locating available land and the materials shortage. Without this, achieving the target of 1.5 million homes by 2030 is highly unlikely.”

TerraQuest’s Planning Portal Market Index points to a persistent issue: over one million homes approved for construction since 2015 have not been built. This stagnation stems largely from a construction workforce crisis. “The retiring construction workforce was named as a key reason for this,” said Geoff, highlighting that an average of 70,000 workers retire annually while only 31,000 new apprentices join the field. This imbalance stymies progress across housing and infrastructure projects alike.

Material shortages, exacerbated by Brexit and the COVID-19 pandemic, further delay construction. Notably, data from July 2024 indicated that the delivery of essential materials, such as ready-mixed concrete, plummeted by 17.1% in the first quarter of the year.

Geoff also noted that land availability remains a crucial challenge. “Announced as part of the National Planning Policy Framework, councils were told that they will need to build on the greenbelt if they run out of suitable space. Advanced data, AI tools and digital platforms can help local authorities locate suitable land and keep applications for new homes moving,” he said.

Although the budget’s £5 billion investment, including boosting the Affordable Homes Programme and appointing new planning officers, is a significant move, Geoff insists it should focus on overcoming these primary challenges and enhancing efficiency. He concluded: “Rachel Reeves, the Chancellor of the Exchequer, highlighted that building Britain was one of the seven key pillars of her budget, but only a digital-first approach will ensure that Britain gets building.”

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