Apprenticeships could solve the skills crisis – but what’s holding them back?

With 80% of SME housebuilders in Yorkshire and the North West struggling to recruit onsite roles, it is clear that more needs to be done to grow the next generation of builders, writes Andrew Argent of Close Brothers Property Finance.

Close Brothers Property Finance, along with the Home Builders Federation and Travis Perkins, has launched the fourth iteration of its State of Play: Challenges and Opportunities Facing SME Home Builders report, which shines a light on the issues impacting the SME housebuilding sector.

So far 2024 has brought some good news for the sector, with major lenders offering more competitive rates and speculation that base rate cuts may come earlier than expected.

However, tough market conditions dragging on buyer affordability and the issues posed by our cumbersome and resource-strained planning system have been consistent challenges for the SME housebuilding sector.

Another persistent problem in the sector is skills shortages, with not enough young people coming through the ranks to replace the generation of housebuilders who are fast approaching retirement age. This ‘retirement crisis’ was also highlighted by Home Builders Federation data last year, showing one in five builders is over 50.

According to our State of Play report, just 42% of SME housebuilders in the North West and Yorkshire currently employ apprentices, down from 50% last year. If you compare this to the national average of 49% and the Central region’s average of 65%, it is clear we need to do more to incentivise SMEs in the region to employ apprentices.

Despite a softening of the overall employment market, 71% of housebuilders nationally said they had struggled to recruit for site-based roles in the past 12 months, up from 59% in the previous year’s report.

In the North West and Yorkshire, the most difficult roles to recruit for have been brickwork, with 51% reporting difficulties. For both plastering and professional/management jobs that figure was 27%.

Young housebuilders are key to sustainable housebuilding

So, what will happen if the number of apprentices continues to drop, and the skills gap widens? We will fall even further behind in meeting targets for new homes, worsening the housing crisis.

The next generation will be vital in unlocking innovation within the housebuilding sector, spearheading modern methods of construction that can help deliver environmentally friendly homes. However, a Construction Industry Training Board report showed that construction is the first industry of choice for just 2% of people entering the workforce.

Much more work needs to be done to make the industry more appealing to young people from different backgrounds. Only by debunking myths and communicating the many positives of a career within the property industry will the sector be opened to a wider and more diverse pool of talent.

More than a PR battle

Another obstacle that is preventing a flow of talent into the sector is the lengthy nature of the Apprenticeship Levy. Many businesses are eager to invest funds from the levy into training and upskilling a new generation of workers but are unable to do so due to the administrative burden.

As a result, a huge proportion of this money goes unspent every year and ends up in the Treasury’s coffers. By reforming the Apprenticeship Levy the government could help unlock greater numbers of apprenticeships, which would go a considerable way towards addressing the skills shortage.

With a general election taking place this year, housing is high on the political agenda for both the Conservative and Labour Parties.

However, 87% of SME housebuilders in the North West and Yorkshire believe the support offered by the government has been insufficient. We hope that greater political certainty following the election will encourage SME housebuilders to invest in recruiting and upskilling the next generation.

• Andrew Argent is business development manager at Close Brothers Property Finance