We are continuing to look at the complexities and challenges of the housebuilding industry by exploring the working lives of various individuals that play an intrinsic part in the sector.
In this final article in our series, Joanne McDaid, a senior associate in our Residential team, sat down with an engineering manager to find out more about the opportunities and the threats they face in their role and what's currently on their desk.
We then interviewed Gemma Whittaker, principal associate in our Construction team, to hear her thoughts on the challenges and opportunities facing the sector and what's keeping her busy – check out the video below.
1) What's on your desk?
"We aren't reworking sites but looking at them from an efficiency point of view, which is of course something we would normally do but we are doing it a bit more vigorously at the moment.
"So when looking at my desk, the pile on the left is our existing sites and opportunities and this pile is getting bigger and more varied each day. The pile on the right is a relatively smaller pile of new sites coming forward. There is no doubt that there are still lots of land opportunities, but our ethos has shifted in recent months with our main focus being efficiency and building greater communities where people want to live."
There is no denying that political instability and the effects of COVID-19 over the last couple of years has had an impact on the housing market and our housebuilder clients' businesses. The pipeline of new sites is constrained by planning delays and material costs remain volatile, although there are signs those are settling now. The description of the interviewee's desk is a common one and we are working closely with our clients to take stock of their current land portfolios, looking at clever ways to deliver results both on their current sites and those coming through the pipeline, whilst being economically disciplined and efficient.
After a period of slowdown in housing sales towards the end of 2022, the housing market is in a position of recovery. Together with our clients, we are pressing on with a sense of cautious optimism, building on a resilient domestic housing market and the expertise within our Gowling WLG team and within our clients' teams.
2) What is keeping you awake?
"The drive for cost savings and efficiency within the housebuilding and construction sector.
"Some house builders are providing massive incentives to buy in order to maintain activity rates or , but as a business it seems we are not taking this position and we are just trying to stay strong, knowing that the demand is real and business will pick up eventually."
As a result of the current economic environment, pressure is being placed on both delivery and investment in the housing market, resulting in difficult decisions being made as developers work hard to optimise their existing assets and deliver dwellings to discharge housing need within a tough market.
We work with our clients to reduce the need for these types of difficult decisions. By quickly grasping new policies and identifying potential legal and commercial issues in these policies, we aid our clients to work through the difficult times and look for new opportunities for business. Generally our housebuilder clients remain resilient and continue to deliver for their customers.
3) What's next in the housing sector?
"The sustainable side of housebuilding. Currently we have requirements and have set our own targets to produce more sustainable homes, as per requirements within the building regulations, by 2025.
"We are already starting to move towards alternative sources of energy usage, such as air source heat pumps and away from gas. We may also start to see the increased use of hydrogen. It will be exciting to see how those projects unfold.
"The pressure to provide sustainable energy solutions is not only coming from new policies but also landowners, who are already pushing for suitable sustainable requirements during negotiations, and buyers who are increasingly interested in the sustainability of their new build purchase. The landowners' position has changed, as before their main focus previously would have been the best value for their site but they now want to be selling sustainable sites. Legacy is becoming increasingly important, which must be a good thing.
"It is great to sell a sustainable product but it can bring its own challenges. For example, generally people are comfortable and familiar with conventional gas systems, so as we move to air source and ground source heating solutions those require an increased amount of education so as to address what could otherwise become a negative perception of a sub-standard solution."
The energy sector is experiencing a period of evolution as the demand for sustainable energy solutions continues to grow. We keep ahead of the game and offer our clients in-depth industry knowledge and tailored legal advice, ensuring solutions which take into account legislative and regulatory change whilst accommodating the realities of delivery constraints.
All our housebuilders have embraced their responsibilities with regard to environmental, social and governance change – and the results are demonstrated in their developments. Our clients' planning decisions are increasingly led by what they can do, and need to do, to contribute to societal shift and legacy. We've helped our housebuilder clients develop and enhance their strategies in this regard, as they navigate their new responsibilities and identify where risks may lie.
4) So what is the next big opportunity?
"COVID-19 changed the way we live and work. As a result, people are looking at what they want from their houses in a different way. It seems most people only work in the office two or three days a week now, so homeworking is a bigger thing. People no longer just want a three-bed house; they might want two bedrooms and a study or a place that has the opportunity for that study. The consumer is demanding more from their home than ever before.
"This space may need to be in the garden, will need good lighting, a window and be a comfortable working environment as well as a home. These points are becoming a subconscious thought when people are looking to buy a house, as the 'must haves' have changed and the list has become longer. That is where housebuilders can be smarter with designs. It might be downlights, space for a desk or a desk already being installed, plug sockets on the walls with Ethernet cable opportunities, or maybe even having a screen in the wall with caballing that can be hidden away once the work day is over.
"Smart living is such a big thing and is here to stay – and investing in companies which give us the opportunity to deliver on these needs seems like it would be a smart move, and that's where a focus must lie."
There's no doubt that the pandemic has changed the way we work and – as a knock-on effect – the way we live.
35% of housebuilders are now intending to include either a dedicated home office room or space, while 40% recognise the value of combined USB, internet and power sockets to facilitate new working practices.
Greater connectivity is also imperative – the Government is enshrining in law a requirement for gigabit broadband to be part of all new build developments, so many new homes are now being 'future-proofed' for the arrival of faster Wi-Fi speeds.
The increased use of homes during the day has brought into sharp focus the need for homes to be more energy efficient, through electricity and heating. Increased insulation and home automation will play a big part in this going forward. Systems like 'Z-Wave' and 'ZigBee' reduce the level of energy drain caused by home devices such as televisions, games consoles, computers and kitchen appliances – so that they go to sleep and wake up when simple commands are given. Lights are automatically turned off in empty rooms, and rooms can be heated or cooled based on whether or not they are occupied This can reduce bills by up to a third, and is akin to some of the technology which has been used in office and commercial buildings for some time now.
5) What is it about your job that you love?
"We do quite a lot of innovation on a site. I get to try and bring it forward in a way that is actually going to benefit a community so there is gain all round.
"It's very rewarding to walk the site once its developed and see people enjoying the work you have spent many years working on - you definitely get a sense of achievement from that and I think that is so important."
The sense of achievement in bringing forward new build residential development is a resounding theme throughout this series. Many hours go into making innovative ideas a reality, from inception to through the legal process and out on to site and into new communities. We enjoy, and share pride in that process, as much as those who are tasked with delivering it.
This video was filmed on 27 February 2023.
At Gowling WLG, our Living team brings together specialist expertise that assists our clients to navigate the ever-changing market trends and policies. Like the engineering manager in this interview, we thoroughly enjoy assisting our housebuilder clients to deliver homes and communities to thousands of people across the UK year on year, despite the challenges we might face. Find out more about how we can help with our full suite of Living resources.