Building the South East back: helping the housing market recover
As part of The Big Conversation, we ran a series of virtual events to explore the best road to recovery for regions across the UK.
On 2 November 2020, stakeholders from the South East of England gathered as part of Lloyds Banking Group’s Big Conversation to discuss the challenges, opportunities and critical areas of support needed to make the housing market accessible to everyone, and ensure the housing sector can play a central part in recovery in the region.
The key issues discussed were:
- A lack of housing supply and affordability are the top barriers to growth in the region.
- Skills shortages are preventing the retrofitting and construction of homes on a mass scale.
- Stretched supply chains and a lack of clarity around housing needs is causing inaction.
- Building more social housing and greater devolution can help unlock the sector.
- Demand-side financial support measures can help address affordability.
- Incentives and investment in skills can help support the move to sustainable housing.
Michelle Blayney, Lloyds Banking Group, Ambassador for the South East
Ben Everitt MP, Milton Keynes North, Member of the Housing, Communities and Local Government Committee
Paul Holmes MP, Eastleigh, Member of the Housing, Communities and Local Government Committee
Andy Hulme, Lloyds Banking Group, CEO - Housing Growth Partnership
Andy Mason, Lloyds Banking Group, Head of Customer Development - Mortgages
Anne-Marie Mountfield, Solent LEP, CEO
Fiona McMurray, Enterprise M3 LEP, Senior Project Officer
Nigel Holmes, South East Housing LIN, Chair
Peter Truscott, Crest Nicholson, CEO
Tim Miller, CBI, Senior Sector Adviser
Tom Paul, Optivo, Director of Treasury & Commercial
Watch the event highlights
Challenges and opportunities
Lack of housing supply and affordability are the top barriers to growth in the region.
- A lack of supply and complexities around planning mean the challenge to meet the region’s ever-growing demand will grow.
- Affordability of housing for first time buyers is a significant barrier to recovery in the region - since the 1980s house prices have increased three times more than wages have.
Skills shortages are preventing the retrofitting and construction of homes on a mass-scale.
- Skills shortages in engineering, design and construction mean SMEs are currently unable to meet demand for new homes and to carry out retrofitting on a mass-scale.
- There is little financial incentive for homeowners to undertake retrofitting as the high costs currently outweigh future savings from energy efficiency.
Stretched supply-chains and a lack of clarity around housing needs is causing inaction.
- Disrupted supply chains are prohibiting SME builders from accessing the materials they need.
- Failure to identify housing needs and a lack of specialist options, such as retirement homes, means construction is slow.
"The financial sector needs government support to provide mortgages with higher loan-to-value ratios to first time buyers."
Paul Holmes MP
Solutions to support housing growth
A major and sustained social housebuilding programme and greater devolution can help unlock the sector.
- Building more social housing can help stimulate growth and address affordability.
- Localising the planning system and greater collaboration between local authorities, SMEs, and investors can help identify the types of homes that the region needs and in the right locations, working together to allow for a faster, more targeted delivery.
"New forms of financing and shared risks will be important to allow people to get on the ladder and move through it."
Ann-Marie Mountfield, Solent LEP
Financial support measures on the demand side can help address affordability.
- Introducing a government backed mortgage guarantee for high loan-to-value lending as a replacement for the Help-to-Buy Scheme, highlighting the benefits of Shared Ownership, and extending the Stamp Duty holiday can help first time buyers.
Investing in skills and incentives can help support retrofitting at a mass scale.
- Investment in skills and training is seen as critical to developing the infrastructure needed for retrofitting at a mass scale.
- Extending the Green Homes Grant, Stamp Duty rebates, and new products such as green mortgages can help incentivise homeowners to uptake retrofitting.