Our Chief Executive Paul Campbell discusses industry issues and the year ahead:
It’s customary at this time of year to do an annual review and send you all Christmas wishes. Of course I’d normally hope that you would manage to read it in-between all the frantic Christmas celebrations that our industry is famous for, before you break up to enjoy some well-earned rest or take to the slopes.
But frankly we can’t really ignore the elephant in the room of Covid-19. It’s not exactly been a vintage year; we’ve all spent rather more in our houses than we’d ever hoped; and the only skiing most of us will be getting over Christmas is on a dry-ski slope!
Back in my June review I reflected on the upheaval of the prior months and a number of people commented that I struck an optimistic tone. I did question whether it was perhaps too optimistic, but my instinct was that our industry would be more robust than many were predicting – despite the mainstream press forecasting a big downturn in the housing market.
As it happens, I was happily correct on a number of the themes and predictions I made and I think we all recognise that the circumstances of 2020 really have elevated the importance of the home. It provides us with security, belonging, identity and privacy amongst other things (a classroom and office for some!).
People have been reflecting on whether they are in the right home and if not have been spurred to do something about it. This has driven incredible plot sales for housebuilders since they reopened their sites in the summer and, after initial cautiousness, has led to a resurgent land market which looks to carry into next year.
The planning system
It’s also been a year of big proposed changes to the existing and proposed planning system and there has been too many column inches dedicated to the subject without me rehearsing it all again here. Suffice to say though the Government has made a bit of a dogs-dinner of the whole thing and there are suggestions that many themes from the White Paper will be kicked into the long grass, which I actually think would be a wise move.
Yes, the planning system needs tweaking (Duty to Cooperate isn’t fit for purpose and we need to restore the presumption for a start). But ultimately we have a planning system that could work so much better if we properly resourced it, and if the Government was willing to intervene in plan-making more rigorously.
Too many plans go nowhere fast and we can’t shy away from a grown-up conversation about the Green Belt if we’re to tackle the housing crisis, particularly in areas of acute affordability, or rather un-affordability for many.
Land supply
As we go into 2021 I’d like to highlight what I think is going to become a pressing national problem: land supply. Over the last 10 years the large housebuilders have reduced their owned and consented landbank (I don’t like using that term because of the negative and wrong connotations we often see in the press) from over 6 years to approximately 4 years.
Housebuilders have become more ROCE driven and made their capital work harder, enabling them to push growth in volume over that period. That has relied on a regular supply of consented land in the market place and housebuilders acquiring on a just in time basis.
But in my view the supply of land is worsening, partly owing to plan-making being disrupted by too many General Elections in recent years; the Brexit effect to Local Elections; and now the new excuse for everything, Covid. This has unfortunately coincided with the tightening of the appeals system.
This poses real problems for the replenishment of sites when plot sales rates are so high and, perhaps counter-intuitively, could present an even bigger problem if sales rates slow or normalise, since housebuilders will need more outlets to drive the same volume of sites.
Housebuilding
Housebuilding is vital to the economy and the wellbeing of the nation and is perhaps more capable than any other industry to absorb the redundant labour of harder-hit industries.
I believe the Government needs to be bold and unleash the short-term potential of housebuilding through measures which include publishing the revised standard method without delay; updating the NPPF to give real teeth again to the “tilted balance”; and to immediately consult on a clear Written Ministerial Statement highlighting the significant weight that should be given in decision taking to the economic benefits of development.
Thanks to our team
It’s been a challenging year for everyone and I’d like to thank my team who I genuinely think are the best in their industry. Their adaptability and optimism in tough times has shone through and their determination to deliver for the business and our landowners and agents has been truly fantastic and humbling.
We’re also really grateful to all the professionals we work with for their help throughout the year and we’re really looking forward to making up for those missed Christmas drinks next year as things hopefully get more back to normal.
Looking forward to 2021
2021 for Richborough is set to be our busiest ever. We’re poised to push on for further growth, especially if the Government is serious about not just tackling the housing crisis but maximising the economic growth for the country as we try and repair the damage caused by Covid.
Looking ahead, my personal hope is that we’re all able to better rationalise the threat that Covid poses. Of course it is a disease that mainly affects the elderly and vulnerable with underlying health issues. It’s important that we find a way of protecting the most vulnerable in a way that doesn’t lead to generational economic deprivation. This particularly applies to younger generations who continue to store up largely unseen mental health and other medical issues that have unfortunately gone on the back burner whilst focus has been on the pandemic.
Some people will of course take comfort from the vaccine breakthrough but we must be realistic that it is not an absolute panacea. We ultimately have to learn to live with the disease in a more confident way, like we have done with many others that have gone before it.
It’s also more important than ever to support local businesses and the community and to ensure that we do all that we can for the younger generation and less well-off who are unfortunately disproportionally affected by the crisis.
This Christmas we’re proud to be supporting a wonderful local charity called St Basils . It works with young people to enable them to find and keep a home, grow their confidence, develop their skills, increase opportunities and prevent homelessness. We urge you to try and support them too.
So, all that leaves me to do is to wish you and your family a wonderful Christmas and 2021. We look forward to working with you and seeing you next year.