Back DAY 2: Housebuilding and construction lie at the centre of the UK’s economic recovery.
With Secretary of State Robert Jenrick running late, Savills research director Lawrence Bowles opened proceedings with a typically incisive presentation on future trends in residential development.
He forecast house price growth of 4 percent in 2020, despite the wider economic gloom, and for activity to continue strongly into 2021 before flattening, with further growth to come as the economy reverts to pre-Covid levels by 2023.
Planning reform, the repurposing of surplus retail space, and sustainability would all impact supply, while limited mortgage availability will increasingly push first time buyers towards help-to-buy, shared ownership, and renting, he said.
When the Minister arrived, he reassured delegates that house building and construction would lie at the centre of the UK’s economic recovery. Having failed to mention build-to-rent in his recently-published planning reform white paper, he risked compounding the offence by also neglecting to mention it in his speech.
But under questioning from event chair Mark Easton, he insisted the government did indeed “strongly support build to rent” and was “working very closely with institutional investors to encourage more of those homes in all parts of the country” Government action had kept the housing market moving, he said, with its temporary SDLT cut seeing 40,000 more buyers rush to meet the Chancellor’s SDLT deadline, and mortgage applications surging to a 12-month high.
In the following session, Rob Perrins, CEO of Berkeley Group, said this, alongside the unwinding of help-to-buy, left housebuilders “worried about a cliff edge in March 2021” and argued that market stimuli should be extended.
Geeta Nanda, CEO of housing association Metropolitan Thames Valley, welcomed the government’s focus on housing supply, but said: “We need the grants, we need the land and we need the planning reform to be able to deliver affordable housing for all."
Social impact was the focus of the following session, outlining how businesses could bring climate and ESG policy from the business periphery to its heart.
Instinctif Partners’ Mike Barry advised companies to respond to these challenges now in order to “win big” in the 2020s, while Barratt Developments’ Bukky Bird outlined how sustainability was increasingly key to its stakeholders.
After lunch, panelists debated an old RESI favourite - planning reform. New zonal land allocations had the potential to “turbocharge” local plans and engage communities, said Victoria Hills, chief executive of the Royal Town Planning Institute.
“Let’s bring together the key players with money to spend in education, health, infrastructure at a city/regional sub-level, align investment strategies and effectively fast track building projects,” she said.
Vicky Pryce, chief economic advisor at the Centre for Economics and Business Research underlined that “uncertainty remains the key message underlining the economic outlook” during the afternoon’s keynote speech, due to Brexit, Covid, and their knock on impact on employment and consumer confidence.
Paul Bashir of Harrison Street and Richard Jackson of Apache Capital - who together are funding seven Moda Living developments as part of their build-to-rent platform - both saw macro-economic and demographic trends driving investor interest into the living sectors.
Richard Jackson added: "Post-first lockdown we've seen an acceleration of lettings - now averaging 10 a week - and are ahead of underwriting" at Angel Gardens, Apache Capital's flagship scheme with Moda in Manchester.
Another target of investor interest was modern methods of construction, with panelists on a later session in agreement that 25 percent of homes would incorporate MMC by the end of this decade, although still below the 40 percent seen today in Nordic countries.
Dave Sheridan, executive chairman at ilke Homes, said growth was driven by production cost, product satisfaction, and the need to build to net-zero, which ilke Homes now offers as a mass market solution for clients.
This was echoed by Caroline Dove, Partner at HTA Design, who said the post-Covid home of the future would be “beautiful, high-quality, green and mainly modular”.
Smart technology and the internet of things will support the transition to sustainable, post-Covid living in build-to-rent, the day’s final session heard.
Moda director of brand Oscar Brooks said: “By integrating tech properly we can drive convenience for the end user so they have more time to spend doing things they enjoy.”
A sentiment that applied just as neatly to this year’s online-only RESI conference itself.
Patrick Clift, Policy Director, Blackstock Consulting