Banks Blog: “UK housebuilding hits a brick wall”, by Will Allman, planning placement student, Banks Property

May 8, 2019 | Bricks News

Pictured above: Will Allman, planning placement student, Banks Property

Every day, if you watch the news or read a national newspaper, you are likely to be greeted by a story about the UK’s Housing Crisis.

For example: “England ‘needs millions of homes to solve housing crisis’”. [Footnote 1]. And “Target ‘last time buyers’ to solve housing crisis, say experts.” [Footnote 2]

As a country we are not building enough new homes to meet demand. In 2017 163,000 new homes were built in England. This is not enough. Many commentators believe that the historic under-supply of housebuilding in the UK, which arguably dates back to the 1970s, has created a shortage today of around two million homes. To put that into perspective that’s a shortage of housing equal to all the homes in the East Midlands.

Dramatically increasing house prices in London for example in the last few decades is a sign that there are not enough houses to meet demand.

To build more homes to meet demand and to prevent first time buyers from being priced out of the market, successive governments, of all colours, since the mid-2000s, have set a target of building 300,000 new homes per annum. So far they have got nowhere near this figure.

“An Englishman’s home is his castle”

I am starting to think about buying my first home whilst also working in the property industry. The issue of the shortage of homes in the UK, and why the shortage continues to exist, is very much at the front of my mind. Clearly as successive governments and various policy changes have shown there is no quick fix to the UK’s housing crisis.

The reasons cited by Ministers for the housing crisis include: the UK’s growing population; the number of second home properties; a lack of available land; “land banking” by developers; planning policy constraints and a lack of finance to self-build opportunities.

However, during my year at The Banks Group I have been made aware of another important factor: Bricks, and everything that goes into the production of bricks that we need to build our houses.

When looking into the extent of brick shortages in the UK it is clear that the demand for bricks has been continuously outstripping the UK’s supply for a number of years. For instance in 2017 a total of 2.3bn bricks were consumed in the UK according to Ibstock Brick. [Footnote 4].

However 312 million of these were imported to compensate for the country’s shortfall as the UK only manufactured 1.877bn bricks that year. [Footnote 5].

Meanwhile the remainder was supplied from depleting stockpiles. [Footnote 6].
To put this into context this was a domestic shortfall in supply of 423m bricks or in other words over 49,764 houses worth. [ibid, footnote 3].

With the UK’s housebuilding industry consuming far more bricks than UK brick manufacturers currently produce, the industry finds itself in an unsustainable and insecure situation with many large housebuilding sites being over reliant on imports and depleting stockpiles. [Footnote 6].

The importation of bricks is an incredibly unsustainable means of attempting to meet the UK’s housing demand. To minimise greenhouse gas emissions bricks and other key building materials should ideally be manufactured and used as locally as possible to reduce emissions associated with their transport.

Issues, one national housebuilder, Persimmon, has gone to the extent of investing £10m in a new brickworks in South Yorkshire to help minimise disruption to their supply. [Footnote 7]

Over the last ten years the average UK home used approximately 8,500 facing bricks – the preferred brick type of UK housebuilders. This would mean to provide enough bricks for England to meet its new housing target of 300,000 new homes per annum an additional 1bn facing bricks would be needed in England every year alone. To imagine the scale of this shortage, 1bn bricks could build Big Ben 529 times over. [ibid, footnote 3].

This means for the UK to be completely self-sufficient in brick production to meet its housing needs, output must increase by more than 63%.

Similar to the housing crisis there is no single answer to increasing the levels of brick production in the UK by such a large extent. However, supportive local planning policies could help.

Even if production facilities were expanded to meet demand, there is a more fundamental question which needs to be addressed – do we have the raw materials for brickmaking?

Facing bricks in this country are made from a range of brick clays and shale as well as unique minerals such as fireclay which are generally associated with shallow coal seams. As a consequence, many brickworks that use larger volumes of fireclay compared to other brick clays and shale have often been located around the country’s shallow coalfields. These brickworks have historically been supplied by surface coal mines, where the mining of the higher value coal resource has made the recovery of the brick shale and fireclay resource economically viable. With the contraction of the coal industry in the UK, there are now very few operational mines left, meaning opportunities to supply essential raw materials such as fireclay for brickmaking are becoming increasingly limited.

Due to this unique relationship between coal extraction and fireclay one of the few remaining opportunities to source fireclay in the north east is at the proposed Dewley Hill surface mine to the west of Newcastle upon Tyne. Dewley Hill is estimated to hold approximately 400,000 tonnes of fireclay. This surface mine which will be operated by Banks Mining will supply enough fireclay to an adjacent brickworks to produce 15m bricks per year, or the equivalent of 1,765 new family homes every year!

In recent years planning policies from national to local levels have all emphasised the need for the right homes to be developed in the right places. However, there is potential for greater weight to be given to supportive national planning policies regarding the extraction of scarce and useful minerals as well as the expansion of broader supportive policies.

Additional and more comprehensive planning policies to support brick production could help to ensure that bricks and other key building materials actually get to sites to build the houses that we so desperately need in the future.

Indeed the National Planning Policy Framework (NPPF) is currently being updated to reflect the need to increase housebuilding rates but does not also recognise the increased importance of planning for the recovery of the mineral reserves which provide the essential raw material required to build those houses. This lack of joined up thinking within government may hamper delivery of one of the key aims of the new NPPF.

Whilst I have focused on the UK housebuilding industry requiring more bricks as a specific product of a raw material it is also important to remember the need for other wider raw materials in order to produce essential building materials, such as concrete and steel.

As you will have seen from our very first blog post, high quality coal such as that found at Dewley Hill is essential in the manufacture of these wider products. For instance 0.5 tonnes of coal can produce up to 15 tonnes of concrete which is the average amount used in the construction of the typical UK home.

Taking a step back now however, it is clear that the NPPF which has recently been updated now emphasises the need for increased housebuilding rates across the country. However, very little attention has been given to the importance of planning for the recovery of essential mineral reserves. Without these essential mineral reserves there is a clear risk that the country will not be able to build the houses that it so desperately requires. It is this lack of joined up thinking that could potentially hamper the delivery of one of the key aims of the new NPPF.

As the National Association of Estate Agents (NAEA) put it: “We all know that the massive lack of supply in housing is an issue that needs resolving urgently. As well as freeing up more land to ensure we can build the right sort of houses in the right places, it’s crucial we have the right materials and skills to do so.”

By Will Allman, planning placement student, working at Banks Property for a year. Will started in July 2018

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Footnotes:

1) BBC News online, 8 January 2019, see: https://www.bbc.co.uk/news/uk-england-46788530

2) Daily Telegraph, Sarah Knapton, science editor, 25 February 2019, please see: https://www.telegraph.co.uk/science/2019/02/25/target-last-time-buyers-solve-housing-crisis-say-experts/

3) National Association of Estate Agents (NAEA), please see: http://www.naea.co.uk/media/1044993/bricks-report.pdf

4) Ibstock Brick: https://www.ibstockplc.com/~/media/Files/I/Ibstock/investor-docs/results-and-presentations/ibstock-interim-results-presentation-2018.pdf

5) Ministry of Housing, Communities and Local Government (MHCLG)Table 211: permanent dwellings started and completed, by tenure, United Kingdom (quarterly)

6) Department for Business, Energy and Industrial Strategy: Material Statistics Brick Data 1949-Present, please see: https://www.gov.uk/government/statistics/building-materials-and-components-statistics-july-2017

7) https://www.thisismoney.co.uk/money/markets/article-3898792/Builder-Persimmon-forks-10m-plant-make-bricks-amid-booming-demand-new-homes.html

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