We are still not building enough houses in the West Midlands

By David Penn, a partner

There has perhaps never been a time of greater complication and uncertainty in construction and development. This is at a time when there has never been more need for construction, other than post-war.

There has also perhaps never been so much contradiction between and within sectors.

Construction’s long lead-in and gestation periods make planning and forecasting very difficult, particularly with a planning system that’s not fit for purpose.

Let’s start with the most obvious sector –the only one the media bother about and the only one politicians mention publicly – residential.

We know we haven’t been building enough houses since the 1960s to keep up with changing demographics and population growth. Every year a government will declare “We will build 300,000 houses”. No, they won’t build any houses – that's left to the private sector and partly publicly financed housing associations.

I often hear people complain about the number of new houses in … (fill the blanks with Warwick, Banbury, Nuneaton, Tamworth, etc.) followed by moans about lack of infrastructure.

But we are still not building enough houses, and relying on the big six housebuilding companies will never meet governmental declarations.

There are also numerous local authorities which haven’t had local plans adopted (Solihull MBC’s is from 2011!) which are now in limbo awaiting more tinkering with the National Planning Policy Framework.

I fail to understand - other than kowtowing to the anti-development, 'Blue-Wall' – why Michael Gove scrapped top-down, central housing targets, leaving it to councils and local stakeholders to decide what is delivered.

Commercial development is in a bigger mess. Demand for “sheds” has ballooned with online consumerism and development has concentrated on large allocations near major infrastructure. With a chronic under-allocation of land, this means eye-wateringly high land prices and little surplus land to build for SMEs and companies which need low density commercial land.

At Bromwich Hardy we are involved with excellent new-build schemes around Coventry and Warwickshire such as Barwood Capital’s Exhall Gate, Coventry, Warwickshire Property Development Group’s Sucham Park at Southam and Wigley Group’s new scheme at Rowley Drive, where take-up and interest are very strong at high rental and sale levels.

SEGRO’s Coventry and Warwickshire Gateway Scheme is at full tilt, with massive lettings to DHL and Syncreon and two speculative units. These schemes prove that demand massively outstrips supply.

This has meant astonishing increases in rents and capital values for commercial land and buildings. There is insufficient second-hand stock coming to market and this will restrict the growth our economy needs.

The offices picture is very different. They can only be built in major business districts like Birmingham, with a rare but quality example at Friargate at Coventry Station.

Elsewhere, very high construction costs mean rents needed to deliver speculative office stock cannot be justified at feasibility stage, and finance is extremely difficult to acquire.

The British Council for Offices says we are at 85 per cent of pre-pandemic occupancy and companies tend to need more space, so we do expect demand to come back.

City centre regeneration and planning is extremely long-term but we are seeing major progress at the Coventry City Centre South scheme where Shearer Property Regen has started work to deliver new homes, a hotel, cinema, shops and restaurants, having previously worked wonders with the Cathedral Lanes scheme at Broadgate.

But, outside these areas there is little activity and considerable economic gloom, with rampant inflation, especially in construction costs, high interest rates and a tricky banking sector, and a planning system that's going backwards.

It’s a mess, but not without positives and opportunity for those brave enough to take a long-term view.