Housebuilding targets to help grow economy next year, RSM says

RSM has said it expects increased housebuilding to help grow the UK economy by 2% next year.

In its latest quarterly review, the financial services specialist said there would be “a sharp uptick” in growth next year with this year’s rise of 1% predicted to double in 2025.

RSM economist Thomas Pugh said: “Admittedly, there are plenty of potential risks from geopolitical tensions, Budget-related cost increases and US tariffs but the baseline story is one of the fastest growth since 2022.”

The firm’s head of real estate Kelly Boorman added that last week’s publication of the NPPF would also help speed up building in the coming years by cutting back on planning red tape.

But she warned: “As it stands, the planning system is not fit for purpose to accelerate housebuilding. Areas where there is the most need for new and affordable homes do not have the regional workforce in place to deliver increase volumes which will delay the effects of the new planning framework targets.”

She said government needed to prioritise redeveloping brownfield and so-called grey belt in order to avoid clashes over greenbelt land.

And she said construction businesses “need practical government support” to help them boost staff and skills to help them meet the target of building 1.5 million homes over the course of this parliament.

Over the weekend, the Home Builders Federation (HBF) said there were not enough workers to build all the homes the government had committed to.

The HBF and Barratt Redrow said skills shortages, ageing workers and Brexit were some of the factors behind the shrinking workforce.

For every 10,000 new homes to be built, the sector needs about 30,000 new recruits across 12 trades, according to the HBF.