黑洞社区

It may qualify as the least surprising news of the year - housebuilders got another pay rise last year. 黑洞社区鈥檚 annual housebuilder salary survey - compiled by recruitment firm PSD Group - confirms directors are taking home more money than ever, reaping the rewards of a buoyant sector. The average salary rise across housing director roles was 拢6,000, to 拢96,000, while the value of bonuses as a proportion of a director鈥檚 income ticked up one percentage point to 73%. Managing directors led the way with the largest salary rises on average, of 拢14,000, topping up their basic income to 拢156,000.

Yet beyond the giddy headline pay figures, the survey also throws light on several significant shifting dynamics within the sector. Among them, that directors would now much rather work for a privately owned developer than a PLC; that skills shortages and persistent problems with the planning system could yet stymie the sector鈥檚 growth; and that the private rented sector (PRS) is tipped as the sub-sector most likely to see growth outside the top ten housebuilders. 黑洞社区 speaks to industry leaders navigating this changing landscape to find out more.

Pinch points

When asked which factors were most likely to have a negative impact on the housing sector, directors overwhelmingly chose skills shortages - a whopping 91% of respondents chose this, with planning problems coming second at 60%. Similarly, these two factors were picked as the biggest threats to the sector, by 45% and 33% of respondents respectively.

According to Elliot Course, associate director at recruitment firm PSD, which compiles the survey, the upshot of this skills shortage has been a shift in power from the employer to the employee, reflected in higher wages and bonuses. He says: 鈥淚n the recession it was a case of 鈥榠t鈥檚 a job, take it鈥�, but nowadays candidates can be much more selective, while clients have to be more resourceful when looking at candidates. There are lots of pinch points where specific skills are in high demand鈥�.  When asked what gaps were expected at their organisation over the next five years, sales and marketing came top (47%), followed by land and planning (42%) and commercial (30%).

As candidates become more picky, there鈥檚 been a change in the types of businesses they鈥檙e looking to join. When asked which type of organisation they鈥檇 rather work for, 84% said a privately owned developer, followed by housing associations or registered providers (67%), leaving PLCs a distant third place (46%). Course is not surprised: 鈥淚n a recession candidates go to big business for shelter. But now we鈥檙e in a progressive market. Candidates feel more in control of their destiny and many want to join a small business where they can have more control over their career progression.鈥�

One such business is rapidly-growing Northern housebuilder Story Homes. Operating across Cumbria, Lancashire, North-east England and South-west Scotland, the firm is aggressively expanding - it is on course to turn over up to 拢130m in the year to next March, up 400% on four years ago. The firm is out to recruit 75 new people in this financial year, taking it to 225 staff.

The firm鈥檚 chief executive Steve Errington explains that his business is facing challenges recruiting to meet its expansion targets: 鈥淚t鈥檚 getting much tougher to recruit quality staff,鈥� he says. 鈥淟ots of counter offers are coming back as you鈥檇 expect [and] we鈥檝e had to sweeten the deal. People are really reluctant to lose certain skills. It鈥檚 definitely getting tougher.鈥�

One tactic Story employs to both retain and attract staff is a generous bonus policy, with staff throughout the business offered incentives, from a potential 25% bonus at the lowest ranks up to 50% and beyond for more senior staff. 鈥淚t鈥檚 a kind of John Lewis model,鈥� Errington says. 鈥淲e鈥檝e had a 90% pay out rate in the last two years and we鈥檙e on target to be 90-100% again.鈥� Asked if the current rates of salary and bonus increases are sustainable, Errington simply says 鈥渘o鈥�. Story has introduced a series of graduate, school leaver and apprentice programmes 鈥渢o train and grow our own talent鈥� in order to mitigate the risks of rapid pay increases, Errington says.

Across the sector as a whole, the survey found many firms employing similar tactics - when asked how their companies were looking to bridge the skills gap, over half cited graduate training schemes and full-time education, retaining existing staff and increasing training budgets, at 55%, 55% and 52% respectively.

PRS potential

The private rented sector (PRS) was identified as the hottest housing subsector in this year鈥檚 survey. Almost a quarter of respondents (24%) said it would see the most growth outside the top 10 housebuilders, followed by registered providers (19%) and SME developers (18%). Course says the 鈥渆mbryonic鈥� PRS sector is fast becoming a focus for PSD and its clients alike. 鈥淩esidential development is cyclical, some would say bipolar,鈥� he says. 鈥淲ith PRS you get a constant return for your money.鈥� Course says PRS developers are recruiting from 鈥渟ister markets鈥� such as 鈥渟tudent accommodation, commercial development, residential development and mixed-use鈥�.

For Paul Belson, non-executive director at property services giant LSL, which manages 30,000 rented properties for both individual and institutional clients, the attraction of PRS is obvious. 鈥淭here鈥檚 massive bandwidth to grow PRS,鈥� he says. 鈥淲e are right at the beginning of it. There are so many people coming out of university, those who start work 鈥� they simply don鈥檛 have enough for a deposit.鈥�

Belson is a former member of the government鈥檚 PRS task force, set up to promote expansion of the sector and to fire up build-to-rent schemes through planning and financial incentives. He notes there is huge potential for institutions to invest and run PRS schemes: 鈥淚n the UK just 1% of PRS is run by large institutions, yet it鈥檚 37% in Holland.鈥�

As build-to-rent is relatively new to the UK, recruiting the right people to design and deliver these schemes is even tougher. 鈥淭he building itself is a hybrid of boutique hotel, serviced apartments and student accommodation,鈥� Belson says. 鈥淚t鈥檚 a blend of skills. You have to understand property management. There are a lot of requirements needed to create a rented community. There is definitely a shortage of people in this area.鈥�

For those working within housebuilding, the range of career opportunities is now plentiful, as are potential financial rewards. How long can it all last? That鈥檚 the million dollar question, one that the PRS developers think they have an answer for. Outside of that niche, housing professionals can be forgiven for making hay while the sun shines.