Big housebuilders ‘comfortable’ with lack of innovation, says Gove

Volume housebuilders are too “comfortable” with their working patterns to embrace innovation, according to Michael Gove.

The housing secretary was appearing in front of the House of Lords’ built environment committee and was addressing the perceived failure of modern methods of construction (MMC) to take off in housebuilding.

Gove noted that there was currently an inquiry into housebuilding being conducted by the Competition and Markets Authority, due to publish its findings this month.

“My observation would be, without criticising the main volume housebuilders, is that they have pattern books, ways of operating with which they are comfortable, that means that some of the innovation here doesn’t perhaps have the attractions that it might,” he said.

The secretary of state also said that a desire to support smaller, regional contractors was part of his reason for calling for an inquiry in the first place.

“[It was] not because I wanted to kick anyone over the head, but precisely because I was concerned about the variety of factors that have led to a reduction in the number of small and medium sized enterprises,” he added.

The committee recently published the findings of a short inquiry into MMC, which accused Homes England of lacking a coherent strategy and questioned why the government’s taskforce on the issue had never convened.

Regarding the taskforce, he said he did not believe it was “necessary”, noting that there had been a succession of changes to government leadership since it was set up under Boris Johnson in March 2021.

He added that there had been increased industry leadership on the issue since then, weakening the need for the taskforce.

Asked about nutrient neutrality, Gove explained that a “congested King’s Speech” had meant that other agendas, including renter and leaseholder reforms, had taken priority over standalone legislation to address the issue.

He spoke about the difficulty of balancing environmental protections with housing delivery but said the current application of the rules was “inflexible”.

“It hits development, and it doesn’t deal effectively with the real problem, which is with water companies and with some farming practices, but in order to get to the right outcome there it is tough going,” he said.

Gove disputed the HBF’s claim that 150,000 homes were being held back by nutrient neutrality rules, saying that the department wanted to “err on the side of caution” with its 100,000 estimate.

Later in the hearing, he suggested that the Conservative Party’s 300,000-home-a-year manifesto commitment could be raised to address increased levels of net migration.

“We do recognise that most informed critics are concerned that even 300,000 new homes a year would not be enough to deal with additional development […] we cannot have levels of net migration at the levels we have had recently without such pressure on housing,” he said.

“It is a live debate about whether or not in the next parliament this 300,000 figure could or should be revisited”.