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Brexit would lead to shortage of construction staff, says Barratt boss Brexit would lead to shortage of construction staff, says Barratt boss
(about 4 hours later)
Britain’s departure from the EU would hit housebuilders’ workforces and exacerbate the housing crisis, the boss of the UK’s largest homebuilder has warned. Britain’s departure from the EU would hit housebuilders’ workforces hard and exacerbate the housing crisis, the boss of the UK’s largest homebuilder has warned.
David Thomas, chief executive of Barratt Developments, said: “We would much prefer that the UK stays within the EU.” David Thomas, chief executive of Barratt Developments, said: “We would much prefer that the UK stays within the EU. We have a significant part of our labour force, particularly within the London market, coming from continental Europe – the free movement of labour in the European market is a positive from our point of view.”
With a “significant part” of the company’s workforce coming from continental Europe, particularly in London, a vote to leave the EU would mean “there would be even more pressure in terms of skills shortages”. This would affect the industry’s ability to build much needed homes, he argued, echoing warnings from other housebuilders, including Berkeley Group. A vote to leave the EU would mean “even more pressure in terms of skills shortages”, he argued. “If you ask any housebuilder what their main challenge is, they say it’s labour availability.”
This would hamper the industry’s ability to build much-needed homes, he said, echoing warnings from other housebuilders, including Berkeley Group.
Related: Brexit would hit house prices significantly, says George OsborneRelated: Brexit would hit house prices significantly, says George Osborne
Thomas estimates 30-40% of Barratt’s workforce in the capital hails from mainland Europe. “It wouldn’t be unusual to find 10-plus nationalities on a London construction site, and dual language signs,” he said.Thomas estimates 30-40% of Barratt’s workforce in the capital hails from mainland Europe. “It wouldn’t be unusual to find 10-plus nationalities on a London construction site, and dual language signs,” he said.
The uncertainty created by a vote to leave in the 23 June referendum would also hurt investment, with housebuilders operating on a five- to 10-year horizon, he warned. Barratt has invested more than £3.8bn in land for new housing in the past five years. At Berkeley, which builds luxury London pads, about half of its 14,000 subcontractors come from eastern Europe, according to its boss, Tony Pidgley.
Its business has been little affected by the forthcoming EU vote, apart from the top end – reservations of £1m-plus homes have slowed marginally, to 44 in the past 19 weeks, compared with 46 a year earlier. Overall, forward sales rose nearly 10% to £2.8bn, underpinned by the government’s help-to-buy scheme, which started in February. Across the UK, nearly 12% of construction workers come from abroad (246,000 out of 2.1 million), official figures show – mainly from the EU (the actual number is probably even higher, experts say). Poland and Romania are the most common countries of origin.
The company has launched 51 new developments. It plans to raise the proportion of plots it brings forward for housebuilding by nearly a quarter this year, to 21,000-23,000. The construction industry employs 324,000 fewer workers than it did in 2008, before the financial crisis and recession led to a slump in housebuilding and other construction projects, prompting companies to slash their workforces. This has made the sector heavily reliant on construction workers from eastern Europe and the rest of the EU, as it takes years to train skilled tradespeople.
The number of migrant workers more than doubled in the 10 years to 2011, noted Simon Light at design and consultancy firm Arcadis. “The migrant workforce has been the most effective short-term fix for the UK’s construction worker shortage.”
A report by his firm last year found that 53,000 extra bricklayers were needed to build 200,000 homes a year. But the UK is also recruiting carpenters, joiners, plasterers and general labourers along with architects from the EU.
Steve Turner of the Homebuilders Federation said: “Because the industry is reliant on labour from the EU, in the event of Brexit we would be pushing the government hard for a quota system … considering that housing is such a priority priority for the government, we would anticipate that the government would listen to our concerns.”
He pointed to a quota system for construction workers from Ireland that had been in place in the 1960s. Thomas warned that the uncertainty created by a vote to leave the EU in the 23 June referendum would also hurt investment, with housebuilders operating on a five- to 10-year basis. Barratt has invested more than £3.8bn in land for new housing in the past five years.
Its business has been little affected by the forthcoming EU vote, apart from the top end – reservations of £1m-plus homes have slowed slightly, to 44 in the past 19 weeks, compared with 46 a year earlier.
Overall, forward sales rose nearly 10% to £2.8bn, underpinned by the government’s latest help-to-buy scheme, which started in February.
Savills, the upmarket estate agent, said there was a spike in activity its UK prime residential business before the stamp duty increase last month, but it had slowed since then in the run-up to the referendum.Savills, the upmarket estate agent, said there was a spike in activity its UK prime residential business before the stamp duty increase last month, but it had slowed since then in the run-up to the referendum.