A series of insights from friends of the firm and long-standing leaders across the Built Environment
We received an overwhelmingly positive response to our first article in our insights series, Building Together for the Future, which explores the “Bright Spots” in the built environment.
In the second of our series, looking at topics and themes of importance in the Built Environment, we are focusing on the big industry challenges. We asked what is top of mind for leaders in the sector, and what are they doing to address the challenges at organisational, sectoral and government levels.
We are grateful to our contributors for their valuable insights, including:
- Hugh Seaborn, Chief Executive of Cadogan Estates
- Richard Donnell, Executive Director of Houseful
- Emily Cox MBE, Chair of Gentoo Group
- Andy Hulme, Group Chief Executive Officer of The Hyde Group
A polycrisis paradigm
For our leaders there is a recognition that “business as usual is actually a perpetual management of crises.” This places challenges on leadership at board and executive level.
This was articulated by one leader: “The frequency and clustering of challenges has been like nothing I have experienced in my previous 25 years in Housing Associations”. It is a situation that is unprecedented, certainly in this generation of leadership. The risks and compliance have increased in a manifold way, operationally, regulatorily and financially – for some ten-fold.
This requires resilience at a senior level, but also means that a greater framework of risk management needs to be developed and regularly referred to. The impact of this across board rooms means there is a greater focus on operational activity than has existed in previous times.
In addition, the need for greater compliance and increased safety procedures has meant that there is a reputational challenge that has arisen. The default view of the sector, especially in some Housing Associations as “a free-for-all kicking shop” has to be overcome. It requires action and a collective response, but it is a long road of recovery and that needs trust in leadership and transparency in approach.
One interviewee observed that “this single solution mindset is a hangover of the 20th century and we need to change how we look at the problems.” That doesn’t mean there aren’t answers or solutions to the challenges, but asking the right questions from the outset is absolutely crucial.
People and planet – it’s not a zero sum reality
There are fundamental demographic shifts that need to be considered in the whole picture. An ageing population and falling fertility rates in the UK are a reality, as with many other parts of the world. By 2028 there will be 6 per cent less under 50s in the population than there were in 2018 in the UK. This has implications on building requirements from houses, to offices, care homes to retail.
The way we live and the type of homes, must be a serious consideration. Care homes are not the answer for the elderly in the long term. This means that access and availability at both ends of the scale, from first-time buyers to down-scalers must be considered. All of our leaders agreed homogenous housing estates are not going to cut it.
The emphasis must be on community, sustainability and planning and design. However, there are sticking points to this as one commentator said: “The mantra around thriving communities is very welcome and should be encouraged, but the plan of funding it is currently a dream.”
Consumer demand is evolving at a pace previously unseen, and in an industry which has traditionally had a “component-focused approach”, the customer-centric view requires a shift in leadership thinking, as well as funding. It cannot be a case of building just what works well for a developer or even in a planning context; it must be much more about what is needed for the population and, without question, the planet.
This can be done in a variety of ways. Considering the value of land differently, with much more focus on valuing appropriately rural space, tree canopy cover, gardens and permeable areas in one. The sector has to focus on greater biodiversity, and that requires “careful planning, better questions being asked, and more collaborative, strategic thinking rather than waiting for regulation to catch up.”
Best laid plans
The new government has certainly made progress in putting housing and community in poll position of its agenda. That has been welcomed by the leaders we spoke to (and articulated in our first series focus). There is clearly an ambition to understand and address the challenges. However, that does not mean wholesale ripping up of the planning system, nor does it mean just building houses to meet targets.
In terms of the planning system: “We need to be thinking more nationally and strategically. Encouraging local authorities to talk with one voice and discuss the investment they need will be crucial.”
However, for planning changes to be meaningful, affordability must also be addressed, particularly in areas such as the South-East of England. The private housing market has driven the model in the last 15 – 20 years, but that puts significant pressure on the rental market and the availability of affordable and social housing continues to be a challenge. High demand and a low supply of properties continues to keep rents high, but the number of homes available for rent is rising. There are still 25% less rental properties available in 2024 compared to 2019.
The approach to land value capture needs to be reconsidered. As one commentator said: “I think we can do bring change in this area but boy is it going to need some serious leadership from government to bring it about.”
A redesign of the housing market and how we measure land value is also a key part of the discussion; including how we use technology, tokenisation or fractional ownership The current ownership, rental or part-ownership model does not appear to be fit for purpose in the long term.
For the generations to come
There are areas where our leaders can bring real change and impact, but ultimately there needs to be greater support and innovation at a central government level. We have a significant skills shortage, which it was suggested has been heightened by Brexit, but also other global events. There is a lack of materials supply, crucially in areas such as concrete, and that is causing delays in any area of development and build. We are not incorporating and utilising technology and data in the ways that we could be, and that will become an expectation for future generations.
These are all challenges which impact at both a macro and micro level, but no one organisation or leader can drive change by themselves, nor should they. We all need to learn and evolve together.
We needed change at a wholesale level – that is apparent in the introduction of a new UK government. And with this change, there are some fundamental policies which need to be reconsidered: safety regulations must be met and as quickly as possible; sustainability and the net zero agenda need better regulation and a greater consideration for the costs to implement these changes; long term rent settlements and formulas must be updated and made realistic; and leaseholds need to be reconsidered and clearer, more implementable rules need to be drawn up.
These are not insurmountable challenges, and with a more open and collaborative approach to discussion and question scoping, there is a view from our interviewees that change can and will come.
Adviser view
As trusted advisers in this space we realise there is a juggle in all of this. Our leaders are naturally, and appropriately, encouraged to think strategically and long-term. However, the necessity of living through short term crises makes that very difficult. Innovation and looking beyond our own borders are going to become necessity, not just for skills and talent, but also to understand where we can learn and embed new systems and approaches to make our built environments the best they can be.
All chapters:
Chapter 2 – Industry obstacles and how we can challenge them together
Chapter 3 – A post-budget insight
Chapter 4 – Priorities for the next decade
Committed to Leadership Excellence in the Built Environment
Our Built Environment practice group is committed to finding and supporting excellent and authentic leaders across infrastructure, local and regional development, housing and transport to deliver tangibly positive benefits for existing, emerging and new communities across the UK. To find out more about how we can support your organisation’s leadership development and appointments, please get in touch with Vidhu Sood-Nicholls or Hannah Scarisbrick in our team.
Further reading: