2 November 2018

Letwin Review: SMEs are crucial to solving the housing crisis

The Letwin Review rejects criticisms of landbanking and welcomes calls from industry bodies to diversify the housing market and speed up house building on large sites.

Small and medium-sized (SME) house builders have previously told the Government on repeated occasions that large sites which deliver standardised design, do not lead to good master planning and sustainable property sales.

The Review states the need to build on sites of all sizes, as well as identifying the lack of skilled workers as a major barrier to house building.

Letwin has made the following recommendations, suggesting they come into force in 2021:

  • introducing new planning and funding rules for large sites in high housing demand areas;
  • forming a national expert committee to adjudicate disputes;
  • creation of a ‘flash’ skills programme to be delivered by major house builders;
  • increasing compulsory purchase order (CPO) powers.

The National Federation of Builders (NFB) welcomes the Letwin Review’s conclusion on the skills challenge, the benefit of splitting large sites, and the importance of small sites.

While the NFB agrees with Letwin on the challenges and conclusions, the Review focuses almost entirely on large sites and volume developers. It therefore overlooks best practice already carried out by SMEs.

SMEs have a long history of building diverse housing on sub-divided large sites. They tackled Britain’s post war housing crisis in the 1950s and built the numerous 1980s estates. Planning policy may not need to change to promote diverse housing types. 

SMEs train 66% of construction apprentices, employ within 15 miles of their head offices, and are the predominant rural employer. Excluding them from any ‘flash’ skills programme would be highly imprudent.

Statistics show that we rely on large sites and not small or medium sites to meet housing need. With the Government keen to encourage greater housing diversity, the industry should redouble efforts to enable more small sites and infill.

Richard Beresford, chief executive of the NFB, said:

“The Letwin Review recognises that developers would rather build and sell, than not build at all. Its recommendations will help build sites more quickly. It also needs fine tuning to build the right homes and train skilled workers in the right places.”

Rico Wojtulewicz, senior policy advisor for the House Builders Association (HBA), added:

“SMEs have a bigger part to play in implementing Letwin’s recommendations than the Review itself concludes. We welcome the review period before the Government publishes its final response.”