OUR ECONOMIC AND SOCIAL IMPACT 2017-18 Building HOMES Building VALU E INTRODUCTION A breadth of experience, a depth of purpose. Bellway has over 70 years of housebuilding experience, having grown from a family-owned, local business in North East England to become one of the UK’s largest house building groups. Our operations not only impact sizes that meet local demand and the number of quality new homes customer requirements. we contribute to the national We directly employ over 2,900 housing stock but also the people, and hold evolution of local communities, the Home Builders and employment in sectors from Federation (HBF) building trades to sales. In the last 5 star rating - year1 alone we sold 10,307 homes a long-standing, (2017: 9,644) in a range of styles established indicator that reflect local influences and in of quality. 2 INTRODUCTION A period of The UK’s population has been jobs and employment. The HBF growing at its fastest rate in 70 estimates that new house building challenge, and a years, and housing availability generated £38 billion of economic uniquely placed is a major issue of concern at all output to the Great Britain levels, from policy makers and economy company. planners to would-be purchasers. in 20172. Operating through 20 divisions We believe that housebuilding is covering the main population pivotal in ensuring the sustained centres of England, Scotland economic prosperity of the UK, and Wales, we are extremely and in this, our second Economic well-placed for, and committed and Social Impact Report, we set to, playing an active role in out an overview of the benefits addressing this concern. Indeed our construction activities deliver. we have increased the number of homes we have sold by 33% in the last three years, and by 82% in the last five years 1. Investment in new homes is vital for regional economies as well as 1 All 2018 Bellway figures in this report are for the the broader national economy, Bellway financial year ended 31 July 2018. playing a significant role in directly 2 The Economic Footprint of House Building in England and Wales (2018) by Home Builders stimulating growth and supporting Federation and Nathaniel Lichfield & Partners. This report aims to quantify these benefits, setting out our socio-economic impacts in the following areas: Economic impacts Contributions to public finance Jobs and skills Contributions to local authority finance Investment in community projects 3 BENEFIT OF NEW HOMES New homes – New homes deliver a wide range homes can be viewed in terms of of advantages that not only benefit quantitative and also qualitative benefits the customer directly, but also the benefits, not only raising the number broader economy and society. of homes but also the average far beyond According to the English Housing quality of the housing stock. Survey 2016 - updated in 2018 numbers. A further study undertaken by the - which looked at stock condition National House Building Council and age, some 56% of the Foundation4, a body that carries English housing stock was built out quality research in relation to prior to 1965. Private rented sector dwellings are on average the building industry, cited the older, with 35% built before salient features of new homes. 1919 compared to 21% of These included their ‘new blank owner-occupied homes3. As a canvas’ condition, with no result, with each new expensive home improvements development complying with the or renovations required; the most up-to-date and increasingly 10-year Warranty on structural stringent standards, from energy work; and manufacturers’ performance to security, new warranties on kitchen appliances. 3Source: English Housing Survey - Stock Condition 2016, (updated July 2018), Ministry of Housing, Communities, and Local Government. 4The Advantages of New Homes (2016) by the National House Building Council (NHBC) Foundation. 4 BENEFIT OF NEW HOMES New homes are, by design, now Toughened or laminated safety as well as providing safe places for highly energy efficient. Each new glass is utilised in doors and children to play. In other words, home effectively embodies an windows, which are also fitted they help create not only new but automatic upgrade to incorporate with additional locks and security sustainable communities. the latest standards of insulation, devices, part of an elevated draught-proofing, and double standard of new-home safety glazing, as well as efficient and security. modern heating systems and Finally, for many people moving boilers. Indeed, a new home now to new developments, a new costs approximately half as much home offers the opportunity to to heat as a Victorian home of meet new friends and neighbours equivalent size. who are all part of a process of New homes also come with establishing a new community modern wiring, circuit breaker together. Well thought out public consumer units, and realm can help foster community, mains-powered smoke alarms. leisure and recreational activities, 5 ECONOMIC IMPACT Multiplier Encouraging home ownership, brownfield land make no impact especially for the young and on urban sprawl or encroach effects - for first time buyers, is a policy on green-belt, brownfield supported by all major parties. development also supports our macro The government’s Help to Buy community regeneration and economic schemes continue to be an local economies. important mechanism to support Furthermore, our ongoing land this universal aspiration and in impact. purchases continue to inject 2018 39% of Bellway homes sold significant sums of money into were via the various Help to Buy the economy and in 2018 we schemes. invested £784 million in land In 2018 34% of our homes were (2017 - £655 million), bringing the sold to first time buyers (2017 - number of plots with detailed 32%), helping around 3,500 new planning permission (DPP) that homeowners get their first foot we currently own or control to on the property ladder who 26,877 (2017 - 25,655). otherwise may not have been able An oft-cited criticism of developers to purchase. In addition, a further in general is that they ‘land bank’ 20% (2017 - 22%) of our homes to the detriment of the provision were sold to affordable housing of much-needed new housing. providers and councils, allowing Our business model focuses them to be let at low rents or sold on securing land which either as affordable home ownership to benefits from outline planning people in housing need. permission, or is assessed as being Additional economic benefits likely to obtain DPP within the next derive from the type of land we few years. With a buoyant housing develop. Last year 53% of our market and strong customer new homes were built on land demand, we consistently aim to previously developed (2017 - 59%). start construction on sites as soon Not only does building on existing as is practicable. 20% 34% 53% delivered to homes sold brownfield affordable housing to first-time land providers buyers 6 ECONOMIC IMPACT However the pace at which we can progress with developments is driven by a number of factors - how quickly detailed planning consent can be secured and implemented; market demand for houses; availability of a skilled workforce and materials; and the installation of utilities. A key issue we face is the shortage of skilled trades, which continues to be a pressing concern. Along with the rest of the construction industry we are investing in training and apprenticeships to ensure we minimise the impact that any skills shortage may have on our capacity to build. The economic benefits that result from the direct employment of our 2,900 plus staff across our 20 sub-contractors and suppliers, operating divisions are significant, and include the contributions to who again contribute to the local the economy via PAYE tax and and national economies. We National Insurance, as well as estimate that in 2018 the total their spend in the local number of jobs created by economies. In addition our Bellway’s operation in the UK construction activities lead to economy was between 27,000 5 Using data and metrics from The Economic Footprint of House Building in England and 5 significant indirect employment and 32,000 (direct, indirect and Wales (2018) by Home Builders Federation and across our network of induced employment). Nathaniel Lichfield & Partners. £784m 26,877 27,000 - invested in land plots with 32,000 detailed planning permission total jobs 7 ECONOMIC IMPACT Supplier spend remaining in the UK £1.3bn Local contracts £56m £100m Group contracts in new household spend TOTAL £1.4bn Spend in our supply chain also new home-owner spend provides provides a significant boost to the additional local investment. Using 6 The Economic Footprint of House 7 economy. Of our £1.6 billion data from the HBF , we estimate Building in England and Wales (2018) by spend, we estimate around £1.4 that new Bellway households Home Builders Federation and Nathaniel Lichfield & Partners estimates that at 6 billion remains in the UK , and contributed a one-off spend of £56 least 90% of housebuilders’ supply chain with the vast majority undertaken million (2017 - £48 million) to both spend stayed in the UK. 7 The Economic Footprint of House Building by our local divisions, the regional the local and national economies. in England and Wales (2018) by Home economies where we operate are Ongoing local spend from these Builders Federation and Nathaniel Lichfield & Partners estimates one-off spending on a significant beneficiaries, in a households (local shops and new home is at least £5,000. context where structural regional services) will contribute an 8 The Economic Footprint of House economic imbalance is a real and estimated £270 million per year Building in England and Wales (2018) by Home Builders Federation and increasingly high-profile issue.