The Brexit vote has not significantly impacted the UK housebuilding sector so far. Housebuilder share prices initially dropped after the referendum but have since recovered as housing demand and sales have remained strong. This is translating to continued high demand for housebuilder staff, with the survey finding average director salaries increasing 3% and skills shortages remaining a major challenge for the industry. While activity has slowed in London, the hiring market remains tight overall as housebuilders and housing associations continue expansion plans. However, there is still uncertainty around potential longer-term economic effects of Brexit on the housing market.

1. 30/feature/housebuilderssalarysurvey
21.10.2016 BUILDING MAGAZINE
T
he vote to leave the EU on 23 June will no
doubt be marked down as a watershed
moment for the political and economic
story of the UK. According to the data from
Building’s latest annual housebuilder salary
survey, however, it is not, so far, any kind of
watershed for the housing industry.
Housebuilder share prices fell by up to 40%
after the referendum, given Treasury forecasting
that house prices would be hit by up to 18% by a
leave vote. The reality is that the sector has
largely carried on trading unaffected, with most
builders reporting continuing strong sales.
The salary survey data shows this dynamic is
translating into a continuation of the strong
demand for housebuilder staff seen in recent
years, with big salary increases and skilled and
experienced staff at a premium.
So, if you work in the housing development
industry and were worried about what Brexit
BUSINESS
ASUSUAL
The Brexit vote has ushered
in a time of widespread
uncertainty, but activity in the
housebuilding sector has so
far held up well. Joey Gardiner
looks at what we can learn from
this year’s salary survey and
and asks how long trading can
remain strong
might do for your career prospects, the message
so far is don’t be.
But with some fearing that longer-term
economic impacts from the EU vote may start
to filter through in the new year, and a
combination of factors leading to a slowdown in
construction in London, is it credible that the
sector will escape without any impact at all?
Salary rises
The data from the survey, undertaken by
recruitment firm PSD Group on behalf of
Building, shows average salaries for
directors increasing in nearly every region and
discipline (see table, opposite), with an average
increase of 3%.
With the steepest rises still occurring in
London, despite the recent slowdown in
workloads there, the average MD’s salary in the
capital topped £200,000 for the first time, a 3%
rise on the figure last year.
Regionally, average director salary increases
ranged from 6.3% in London and 5.5% in the
South-east at the top end to 0.4% in the
North-west, the weakest region overall.
By role, many of the highest salary rises were
captured by those on the construction side of
housebuilder businesses. Technical directors
did best with an average 4.6% salary increase,
with commercial and construction/build
directors not far behind.
In the high-demand regions of London and
the South-east, several of these roles – alongside
highly sought after land and planning jobs –
saw double-digit salary increases.
PSD used placement data from throughout
2016 to inform the figures, but its sentiment
survey was wholly conducted in September,
BUILDING MAGAZINE 21.10.2016
feature/housebuilderssalarysurvey/31
after the Brexit vote. The responses support the
idea of a continued shortage of staff, particularly
in construction-related roles.
A balance of 75% of respondents identified skills
shortages as a threat to their business – by a huge
margin the biggest threat facing them. When
asked where the skills gaps were in their
organisations, technical and building/
construction roles were both identified by more
than a third of respondents.
This is more than double the proportion
highlighting skills gaps in any other area,
reflecting housebuilders’ current focus on
building out the development pipelines built up
since the post-credit crunch recovery.
Elliot Course, associate director at PSD, says
that despite all the talk of post-Brexit catastrophe,
very little has changed. “Clients did have a pause.
But in most cases now it’s back to business as
usual,” he says. “I have a number of clients with
ambitious growth plans. There is still an acute
shortage of people.”
This view is supported by Karen Jones, group
HR director at listed housebuilder Redrow, a firm
whose 2,000-strong headcount has increased by
a spectacular 25% in each of the past three years.
Jones says that immediately after the vote, the
firm had a momentary pause, but quickly realised
it wasn’t experiencing any change in the market.
“We never stopped recruiting. We looked around
but realised it was no different,” she says.
Hence the firm is continuing to grow, albeit
Jones estimates that this year’s expansion will be
in the region of 5% to 15% rather than the 25%
previously experienced.
While the continuing strong housing market is
good news for Redrow overall, it also means that
expanding the business with new people is as
hard as ever. “We’re trying to grow outlets and
sites. [Brexit] has not made it easier to recruit,
and at the moment we’re having people
approached by competitors at the same rate as
before the vote. It’s not what I thought would
happen at all,” Jones says.
As both she and the survey confirm, recruiting
technical staff such as QSs and engineers is
particular cause for concern.
Redrow’s story of continued but more
controlled expansion post-Brexit appears to be
typical, given the lack of any significant impact
thus far on sales rates. The salary survey found
56% of respondents seeing an increase in job
opportunities in 2016, down from the 75% who
saw an increase in opportunities last year.
So there’s expansion, but not at quite the same
pace. Cenkos analyst Kevin Cammack says:
“Outside of London, Brexit has essentially had
no impact whatsoever. Production generally is
going up, and most housebuilders will have net
new hires over the next 12 months, though
probably they’ll do it a bit slower than last year.”
Hence skills shortages remain the big concern,
with 83% of survey respondents saying the
government wouldn’t be able to hit its build target.
Former Countryside regional MD Chris Crook,
now a consultant and a non-executive director at
1,800-home a year housing association Orbit,
says he saw no pause post-Brexit. “The executive
team at Orbit are still finding it a challenge to get
the right people with the right skills and
experience – the same factors are at play. As a
consultant, I see an awful lot of large-scale
development on the cards and the level of
experience of people carrying it out is often
woefully inadequate.”
Steve Turner, director of communications for
the Home Builders Federation, says the issue
remains the sector’s “biggest challenge”.
Recruitment puzzle
However, if the housing market’s resilience
post-Brexit vote has been a bit of a surprise, then
the recruitment market in London could be seen
as downright perplexing. In the capital there has
been an undoubted hiatus in work.
OUTSIDE OF LONDON, BREXIT
HAS ESSENTIALLYHAD NO
IMPACTWHATSOEVER.
PRODUCTION IS GOING UP
KEVIN CAMMACK, CENKOS
How much are roles paid?
Regional
average
Scotland Yorkshire
and
North-
east
North-
west
Midlands
(including
East
Anglia)
London South-
east
(Home
Counties)
South-
west
Wales Average
annual
bonus (%
of salary)
2016
salary
average
2015
salary
average
%
change
Managing
director
£158,000 £138,400 £142,000 £160,240 £201,000 £183,000 £158,000 £144,000 78% £160,580 £156,000 2.9%
Finance £87,000 £86,000 £87,000 £90,000 £129,000 £101,000 £89,000 £89,000 74% £94,750 £92,625 2.3%
Development £92,000 £83,000 £91,000 £93,000 £151,000 £109,000 £95,000 £85,000 72% £99,875 £97,250 2.7%
Land and
planning
director
£86,000 £87,000 £91,000 £94,000 £124,000 £111,000 £96,000 £82,000 76% £96,375 £92,750 3.9%
Technical
director
£84,000 £86,000 £87,000 £90,000 £116,000 £113,000 £88,000 £85,000 65% £93,625 £89,500 4.6%
Design director £80,000 £75,000 £81,000 £80,000 £98,000 £92,000 £85,000 £82,000 63% £84,125 £81,375 3.4%
Commercial
director
£88,000 £86,000 £90,000 £93,000 £112,000 £105,000 £92,000 £83,000 70% £93,625 £90,375 3.6%
Construction/
build director
£86,000 £89,000 £93,000 £95,000 £118,000 £103,000 £96,000 £84,000 65% £95,500 £92,625 3.1%
Sales and
marketing
director
£84,000 £86,000 £93,000 £92,000 £121,000 £108,000 £94,000 £83,000 84% £95,125 £92,000 3.4%
Project director £86,000 £84,000 £90,000 £87,000 £132,000 £112,000 £95,000 £82,000 74% £96,000 £93,500 2.7%
Customer care
director
£78,000 £68,000 £71,000 £73,000 £85,000 £81,000 £80,000 £67,000 66% £75,375 £75,500 -0.2%
»

2. 21.10.2016 BUILDING MAGAZINE
32/feature/housebuilderssalarysurvey
Doyou rate the following as threats oropportunities?
Results are presented as a balance of the percentage of those asked, with threats registering as negative and
opportunities as positive
2015 2016
Skills shortage -86% -75%
The leave vote 0% -35%
Planning -36% -25%
Acquisitions and mergers -5% -5%
Foreign investment 33% 14%
Mortgage lenders 3% 23%
Increase in population 41% 41%
More mortgage products available 53% 52%
Government incentives 58% 52%
Current low interest rates 79% 82%
Where canyou see growth in the residential sectorcoming from otherthan the top 10 housebuilders ?
2015 2016
Privated rented sector 24% 27%
SME developers 18% 23%
Development arm of a main contractor 10% 13%
Registered providers 19% 12%
Other 6% 10%
New entrants into the market 9% 6%
Government land releases 7% 6%
Overseas investments 7% 3%
Methodology
The survey was undertaken in September by PSD Group, which specialises in senior level search and
selection across the residential & property sector. There were two elements to the research: an attitudinal
survey that targeted approximately 7,000 individuals at senior management to director level across the
residential sector and data from placements made by PSD in 2016.
For further information on the survey please contact Elliot Course, Associate Director at PSD Group on either
0207 970 9792 or elliot.course@psdgroup.com
The NHBC reports that starts on site are down
by anything up to 60% in the second quarter of
the year – a combination of the Brexit poll, stamp
duty changes on high-value properties and
second home purchases, and the cancellation of
mortgage tax relief for buy-to-let landlords.
It hardly seems like the kind of market that
should be seeing double-digit salary increases,
but both the survey findings and the testimony of
those working in the capital suggest the hiring
market is as strong as ever. How so?
“A lot of housebuilders held back sales launches
pre- and post-Brexit,” says Cenkos’ Cammack,
which he says accounts for the drop-off in starts.
“But I don’t see this as necessarily a clear
indication that will translate into the number of
units delivered in the next two years.”
Cammack’s point is that while starts were paused
by London developers such as Berkeley and Telford
Homes, many have already started launching
schemes again, and few expect the current pause to
turn into anything more permanent.
Jim Martin, executive chairman of residential
QS Martin Arnold Associates, says: “Everyone’s
standing on the sidelines. No one’s pulling
schemes, everyone’s postponing them.”
Given the anticipation that this is merely a
temporary situation, housebuilders are holding
on to their staff. “I don’t hear any stories of people
being laid off,” Cammack says.
This is an experience corroborated by Redrow,
which also works in the capital. “I haven’t heard
on the grapevine about people being let go,”
Redrow’s Jones says.
In fact, contrary to the idea of the labour market
freeing up because of a drop-off in sales,
ambitious plans by several housing associations
to boost their development businesses mean staff
are more in demand than ever.
Martin says: “Bizarrely, you have a housing
association sector with almost unlimited money
– as long as they don’t spend it on affordable
homes. Every single one is talking about more
homes. They don’t have enough QSs, mechanical
engineers, electrical engineers, construction
managers.”
He says construction managers particularly
– the tier below construction directors – are at a
premium for everyone, commanding director-
type salaries in excess of £100,000 or even
£150,000. “They can come in and more or less
pick a number,” says Martin. “Even if the big
builders don’t have something for them to do
right away, they’re happy to pick up good people
and just hang on to them until they do.”
All of which spells good news for those working
in the sector.
Fearof the unknown
All this positivity, however, does come with a
caveat of continued uncertainty about how the
post-Brexit economy will pan out. While trading
is good now, survey respondents identified this as
the second biggest threat to their businesses,
more than planning issues.
PSD’s Course says: “In 2007 no one had any
money to do anything. The difference now is that
firms have stronger balance sheets – but they’re
not 100% confident in the market and don’t
know whether to invest, particularly given fears
raised before the referendum. So far the industry
is defying the pre-referendum critics.”
The HBF’s Turner says: “Brexit has had no real
impact on sales rates and people are still
planning to increase output further and are
recruiting. However, clearly it is still early days
and the industry is obviously monitoring the
situation closely.”
While so far the pause in starts seen in London
has meant that few are able to accurately predict
the state of the market because of the lack of
activity, this “phoney war” period will not last too
much longer.
“It all depends how the sales launches happening
now go,” says Cammack. “If they’re disastrous, then
maybe housebuilders won’t bring to market what
they’ve got in the pipeline. If the market stays
depressed they could sit on them.”
Fortunately for now, those fears remain in the
future. Enjoy it while it lasts.
EVERYONE’S STANDING
ONTHE SIDELINES.
NO ONE’S PULLING
SCHEMES, EVERYONE’S
POSTPONINGTHEM
JIM MARTIN, MARTINARNOLDASSOCIATES
»