Wales: sleeping dragon of housebuilding industry?

Llanmoor Homes was founded by my father, Brian Grey, in 1966 and is now run by myself and my two brothers. During the 50 years Llanmoor has been trading we’ve seen many changes to the industry in Wales, weathered recessions and constructed over 4,000 new homes. Last year we had our most successful year yet in terms of total sales, and this level of activity looks set to continue. Consistently, however, discussion surrounding the housebuilding industry continues to focus its attention outside of Wales and to largely ignore the incredibly successful and growing market here.

Tim Grey, sales director at Llanmoor Homes

At Llanmoor we’ve had great success acquiring land for development in these outlying areas in South Wales. Having completed many successful developments on the fringes of the city and in the South Wales Valleys, we are now also in the process of promoting a very substantial area of land we are holding under option on the outskirts of Swansea for around 1,650 new homes, as well as a number of other exciting larger-scale developments in the South Wales area. We firmly believe that one of the keys to our success has been in understanding that some of the best areas for development in Wales can be found away from city centres such as Cardiff.

Many challenges exist for developers in Wales but in my opinion the biggest of those is our current, ineffective planning system, which is so complicated and slow that it results in planning applications being unnecessarily costly and long-winded. In addition to this, requirements under Section 106 Planning Agreements and the more recently introduced Community Infrastructure Levy System have introduced extra costs which are so substantial that the sites in question can sometimes prove financially unviable to develop. Land that has been allocated for development in outlying areas will often not sustain house price levels that enable a new development to proceed when having to take into account these development costs and obligations. While we do of course fully understand the need to provide new or improved facilities in the areas within which we build our new developments, there needs to be close interaction during the planning application and consultation process to ensure that viability is fully considered to enable development to proceed.

Another significant cause for concern is the lack of new entrants into the industry – at Llanmoor we’ve seen the average age of our employees and contractors increase significantly over the past 10 years. While we are making efforts to promote the huge variety of opportunities and roles available within the industry to local schools and colleges, at present we seem to be fighting a losing battle because schools appear to be more interested in promoting further education than vocational qualifications. In part we may have ourselves to blame for this for failing to engage with schools and colleges to push our industry forward as a fantastic option for young people. We need to make more effort to become involved with schools and to ensure we promote housebuilding and construction at job fairs as industries that present huge opportunities with competitive salary structures – not just in Wales but across the UK. Ensuring that young, driven people know that they can have a fantastic career in housebuilding is incredibly important so that we can continue to meet the demand for new homes now and in the future.

The Welsh housing industry has certainly been through its ups and downs over the years, but there is a very encouraging level of activity in the market at the moment and this is reflected in our sales figures and those of our competitors. There will always be a shortage of new build homes in Wales, due largely to the aforementioned issues with planning and labour shortages, but the ongoing availability of Help to Buy Wales has provided vital support for the industry and our buyers – approximately 40% of Llanmoor’s total sales have been made possible through the scheme – and provided a fantastic boost to the market.

Although the recent EU referendum result has raised concerns for the economy as a whole, it’s important to remember that there remains a significant undersupply of new homes across the country.  With mortgage rates at a historic low, low interest rates, the continuation of the Help to Buy Wales and hopefully ongoing support for the industry from both the Welsh and national Governments, rates of construction should continue to increase and the demand for new homes should remain steady. With this in mind, my feeling is that Brexit shouldn’t have a significant impact on the industry in Wales and in fact in the weeks following the referendum we have continued to see excellent visitor rates and sales results across our current developments.