We need new homes to have any hope of ending UK's housing crisis. So where are all the builders?

A total of 300,000 construction workers have been lost to the industry in the last five years – one builder for every home the government has been trying – and failing – to build each year. If the housing crisis is to reach its end, where are all the builders needed to do it?

It’s now a few weeks since the UK officially slipped into recession and while house prices may have fallen slightly in recent months, they still remain out of reach for many at up to eight times annual earnings in England.

That’s got housebuilders tightening belts – an article in the FT recently carried the warning that housing associations simply cannot afford to build the affordable homes that are desperately needed.

Like many other sectors, the construction industry was hammered by Covid and Brexit and the resulting void of workers, skills and experience is a grim result for the housing and climate crises. 

Analysis from Noble Francis, economics director at the Construction Products Association found European builders who finished projects have been unable to come back to the UK to work due to stricter visa requirements. That loss has been keenly felt in the 25 to 39 years old demographic.

But the biggest losses have been UK-born builders between 45 and 59 years of age who have retired early or retrained to go into another industry. That has resulted in a brain drain in the sector.

Francis says the loss of these workers has “ripped out the backbone of the industry” with 86% of construction in the UK comprising of small and medium-sized firms.

“The practical impacts of the age-demographic problem in UK construction are primarily that there has been a loss of 300,000 UK construction workers but, just as critically, it is the knowledge and experience that has been lost so it is a twofold loss to the industry,” says Francis.

While the labour and skills shortages come at a time when the wider demand for housing is at a critical point.

The elusive government target of building 300,000 homes a year – or the 90,000 social rent homes we need, according to Shelter – means the chasm between supply and demand continues to grow every year.

The latest figures show private house building starts in England plummeted by more than 50% in the last year. The National Housebuilding Council showed the number of homes completed in the second quarter of 2023 were down 11% on the previous year.

The CPA currently estimates the government will miss its 300,000 homes a year target by 40%.

The need to retrofit Europe’s oldest housing stock to meet the UK’s climate change commitments is also significant. Heating the UK’s 28 million homes accounts for 18% of all greenhouse gas emissions and making homes greener is more urgent every day as the deadline to reach net-zero by 2050 moves ever closer.

Progress is also slow here. The Great British Insulation Scheme has so far seen 5,000 homes retrofitted in the year since it launched. Just 2% of the 300,000 homes it was targeting.

Without builders to carry out this work, the housing crisis is going nowhere – and there could be even more dire consequences for climate change

It’s not a problem that is easy to fix.

Close to a third of all construction workers are employed on a temporary rather than permanent basis, according to the Construction Industry Training Board.

Construction business models are also extremely volatile and with the UK currently in the grip of a recession, it is not a time to invest in housebuilding or builders’ skills to do it in the future.

“House builders have to focus on being able to ride out sharper recessions than most industries, which means that they subcontract out the cost, activity and risk to smaller subcontractors,” says Francis, adding that the top 10 UK house builders only employ one person across all areas for every three homes they build.

“Virtually everything is subcontracted out as they cannot risk the housing market collapsing and being left with high fixed costs and lots of people employed because they would go out of business.

“As a result, they are understandably not investing as much as the whole industry needs in construction skills, products capacity and modern methods such as offsite construction. The smaller, specialist construction firms that do the majority of the construction work on site do not have the resources to be able to invest in skills, capacity and offsite construction.”

It’s widely accepted that building more social housing is vital to ending the housing crisis.

Making the economics and the planning system work to allow housebuilders to do it has other advantages too.

“If we want industry to invest in skills, capacity and offsite construction then the house building sector needs to have more stable demand medium-term and long-term, which is only going to happen if government invests in social house building,” adds Francis.

A homegrown solution

A social enterprise in Manchester has a solution to the skills issue and is developing a blueprint for others to follow in their footsteps to be published in the next few months.

B4Box gives youngsters in Greater Manchester work, a salary and training to get into the industry and work on retrofit projects. The firm’s work earned an Ashden Award in 2022 due to its green credentials.

Aileen McDonnell, the founder of B4Box, started the firm 15 years ago and since then it has trained more than 1,400 people.

McDonnell says the pathway works for people who might have “failed academically but are good with their hands” and offers more stability than the casual work prevalent elsewhere. 

“Now how is it an attractive career to have a casual job? And they’re being badged as green jobs? And why don’t young people and why don’t people who live on estates want these green jobs? The answer is they’re not real jobs,” says McDonnell.

“The solution is I think these workers should be paid a monthly salary. Firstly, they can afford somewhere to live and they can plan a future. Secondly, somebody who is being paid properly and trained properly is the only person you want in your house. So they have largely disappeared.

“If we want to decarbonise every single building in the UK, then tell me who’s going to do it: We don’t even have enough general builders.”

The firm has helped people like Jamie Hough, who joined on an apprenticeship 14 years ago and is now the head of B4Box’s training centre passing on skills to young builders.

Hough was out of work for 18 months after losing his job as a sheet metal worker in the 2008 financial crisis shortly after the birth of his son.

“It was 18 months in total having to go to the JobCentre and they’re trying to push you into certain jobs which – no disrespect to those type of jobs – but I couldn’t see a future in any of them,” says Hough.

“I had a young son at the time and I wanted him to see me going out to work in the morning and coming home dirty and tired at night time as I was told that dirty hands equals clean money when I was growing up. So I wanted my son to see when you leave school you get out, you go to work and earn your money and you come home.”

Hough went through a number of unpaid placements and apprenticeships and described the moment he got a paid role as “massive weight off his shoulders”. 

“It gave me a sense of pride, maybe I felt a bit more like I had a place in society,” says Hough.

“I started off as an apprentice. I’ve gone right through the ladder and I’m now passing on the knowledge I’ve gained in the years down the line.

“I’ve been in a very similar situation to a lot of people who come through our door. I’ve worn the t-shirt. I know where they’re at. So for me to be able to pass skills down for them to potentially be able to get into work, produce some good work and make money gives me that sense of pride.”

One of the youngsters Hough trained is now using the skills she has picked up on sites to do up her own home.

Orianne Landers, 27, from Stockport, had a number of seasonal jobs before finally finding a role at B4Box seven years ago.

She, too, has worked her way up the pecking order and has bucked the trend in a male-dominated field. She has also managed to save up her wages working to buy her own home in her 20s – also no mean feat – which she is now renovating with the skills she learned on the job.

“I grew up around council houses and the stuff that these people need help with. So it’s nice to be able to help the people that you grew up with,” says Landers, who bought the home six months ago for £130,000.

“I’m lucky really that I can do a lot of this stuff myself because having to pay all the other people to do all these things I definitely wouldn’t have been able to afford it. They are good skills to learn if you can do it yourself.

“Other than that, it would have been learning on YouTube or something like that.”

B4Box is hoping to encourage others to form social enterprises to shake up the construction industry.

If the housing crisis is ever to end, this could be partly what it takes to ensure we have the tools for the job.

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