Our reaction to the recent government budget announcement…

The UK’s recent budget announcement unveiled billions in funding to boost the housing market, reinforcing the Labour government’s commitment to expanding affordable housing. While welcoming this ambition, Geoff Keal, CEO of TerraQuest, stresses that additional steps are crucial to achieving these goals.

Addressing key barriers to housing delivery

Geoff stated:

"The budget highlighted the Labour government’s continued commitment to building new, affordable homes so that everyone has a place they can call home, which we welcome wholeheartedly. However, to meet the targets set out in the National Planning Policy Framework (NPPF), the Chancellor must embrace digital transformation and tackle the industry’s biggest challenges—the construction skills crisis, land availability, and material shortages. Without this, delivering 1.5 million homes by 2030 is highly unlikely."

Construction workforce crisis slowing progress

TerraQuest’s Planning Portal Market Index highlights a long-standing issue: over one million approved homes since 2015 remain unbuilt. The primary cause being a severe construction workforce shortage.

Geoff explained:

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"The retiring construction workforce is a key factor in this stagnation. Around 70,000 workers retire annually, yet only 31,000 new apprentices enter the field. This imbalance is stalling progress across housing and infrastructure projects alike."

Material shortages and land availability challenges

Supply chain disruptions continue to hinder construction. Brexit and the COVID-19 pandemic have exacerbated material shortages, with data from July 2024 showing a 17.1% drop in the delivery of ready-mixed concrete during the first quarter of the year.

Land availability remains another critical issue. As part of the NPPF, local councils must consider building on the greenbelt if they lack suitable development land. Geoff emphasised that advanced data, AI tools, and digital platforms can assist local authorities in identifying available sites and streamlining housing applications.

A digital-first approach is essential

Although the budget’s £5 billion investment, including additional funding for the Affordable Homes Programme and the appointment of new planning officers, is a positive step, Geoff insists that digital innovation must be at the forefront.

He concluded:

"Rachel Reeves, the Chancellor of the Exchequer, stated that 'building Britain' is one of the seven key pillars of her budget. However, only a digital-first approach will ensure that Britain gets building."

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