Brick by brick

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1:14Take cookouts to sizzling new heights with their marinated salmon and made in house marinated beef and chicken. Entertain with low price 365 brand chips and dips like hummus and guacamole and sweeten every party with brown butter chocolate chip cookies. Remember to pack the cooler with probiotic sodas, sparkling waters and more. Summer savings await you at Whole Foods Market. Wake Up To Money from BBC Five Live. Hello, welcome to Wake Up To Money. We're going to be getting into a few financial issues for younger people on the show today. We've had the UK's biggest house builder tell this programme that it's the worst time to be a first-time buyer since the 2008 financial crisis.

1:59And it's a comparable time to that as well. We'll dig into the details and hear more about that. Meanwhile, this new review from a former government minister today talking about employment opportunities for younger people, saying the UK risks creating a lost generation. and darts fans will be hoping they hear plenty of this tonight.

2:25It's the final of the Premier League darts and we'll be talking to the boss of the company that makes the boards and equipment. Wake Up To Money with Sean Farrington. Good morning to you. Wake Up To Money on BBC5 Live on this Thursday morning, the 28th of May. It's just after five o 'clock. over the course of the last week or so. We've been speaking to bosses of businesses, small and large. We've had many of you get in touch with us as well. And one of the running themes has been about the opportunities in life, at work, at home, having a home for younger people around the UK. And it feels like that conversation is going up another notch this morning as we hear again from bosses, those carrying out some consultations for the government on where this policy goes next.

3:15The front pages of the papers once again dominated by headlines about what the prospects are for younger people at the moment. How bad could they get? Because there's a lot of warnings and what can be done about it. I really would like your thoughts this morning. If you're a younger person yourself looking for work at the moment, maybe you've found that first step onto a career ladder. that many have been struggling for in recent times. If you've got success stories, if you've got stories of struggle, I'd like to hear those this morning. If you have young people in your life, in your family, friends, cousins, whoever it might be, and you're aware of their experiences right now.

3:59Again, the wins, the losses, let's share those stories this morning because we're going to try to get to the bottom of what is going on. We're going to be hearing plenty about the housing market as well. So similarly, not just about your careers, but the rents that you might be paying, the purchase prices that you might be paying for a home if you actually manage to get on the housing ladder. How much of a deposit do you need? How much does the changing prospects for interest rates this year change your plans? Is it that you have a child or a grandchild who is maybe using a bit of your financial power to try and get on the housing ladder?

4:38And how is that looking? Share your stories with us this morning, 85058, because there is a lot to discuss. I've got Laura Lambie with me, Senior Investment Director at Rathbones. Laura, very good morning to you. Good morning, Sean. Laura, I mean, we know, you know, the issue of youth unemployment, young people not in work and in training. You know, it's long been an issue, but it really feels like they've not got on top of it. And when I say they, I just I mean, you know, people in charge of the policies and the decisions that can assist younger people having better prospects in their life. And it sort of feels like it's getting to, is it fair to call it a crisis point when you see some of the discussions around all of this?

5:27I think so, definitely. If you look at some of the statistics, six and ten young people have never had a job. And we talk a lot on Wake Up To Money about the reasons behind this. And there's not one solution, I don't think, and there's not one cause. but we hear from company bosses to say that it's actually too expensive to hire young people. There's no opportunities on work experience. So young people are not getting the opportunity to work and that has massive implications for the future. That is the future of the economy. If you cannot get young people working, then the future I think looks particularly weak.

6:11And one of those industries that would absolutely is already seeing a ripple effect of people not being able to get the jobs that they'd like, the pay that they'd like, the points in the career, the starting points in the career that they would like to get is the housing industry, of course. Whether it is the knock-on effect of the rents that people are able to pay, whether it's the ambitions and the ability that people might have to buy a home as well. And I've been talking to the boss of Britain's biggest house builder who says that first time buyers are living through one of the most challenging times ever.

6:51Conditions very similar to the aftermath of the 2008 financial crisis. This is David Thomas, the chief executive of the FTSE 100 company Barrett Redrow. So that came into being a couple of years ago after a two and a half billion pound merger. He led the business for 11 years. He has done. He's about to retire at the end of this year. We touched on a lot of topics about the housing industry, including how a revolution could be on the way. We'll talk a little bit more about this over the course of the show as well. In terms of how these houses are made, factory production could largely replace.

7:28Brick laying was one of the issues that came up. But we did start on that subject of affordability. I asked David Thomas if there was a risk of a whole generation being left behind in housing. Of course, of course there is. You know, if you look at the way that housing purchases, housing starts, home ownership for first-time buyers, the way that the age of the, you know, the average first-time buyer is increasing and increasing, these are all factors that lead towards generational inequalities. qualities. Put it in a bit of context given you know you've been at Barrett's and now Barrett Red Row for 17 years, a large chunk of that as chief executive.

8:06Is this the worst time ever to be a first-time buyer? It's certainly one of the most challenging times. I'm not sure I would try to decide on the worst time ever but certainly it's going to be close to where we were in terms with the post the great financial crisis. Now that was probably more to do with lending coming out of 2008, 2009. But I think it's very, very comparable for first-time buyers, particularly when you look at areas like London and the South East. There was immediately government support put in place in 2009 and thereafter. So we're now facing challenges around affordability. with no government support scheme in place.

8:55So, yeah, challenging, very, very difficult for first-time buyers. Many started this year thinking interest rates would fall, and the war in Iran began at the end of February. And we've heard how expectations of interest rates and where they will go have changed throughout the year. Depending on who you ask, it might stay about where they are. Some think they might go up. How has that changed the prospects for a young buyer, a first-time buyer this year? What has the war in Iran done to those prospects? It's been a really dramatic change. Unfortunately, I think if you went back over the last five or six years, starting the year and being given a certain message and then finding during the year that that message has changed has become more the norm.

9:43We were doing our half-year results in February. We were expecting an interest rate reduction in March. the percentage probability of a rate reduction in March as I remember was kind of north of 80 % with a further reduction to come in September and in practice we've seen a significant rise in if you look at the two-year fix we've seen a significant rise as the conflict in the Middle East has taken off so if you're a first-time buyer then clearly that's a very dramatically different backdrop now surrounded with a lot of uncertainty. How might you think the changes in the jobs market might affect that because not only just sort of what we're going through economically and business decisions in reaction to higher prices government policy whatever that might be but the way the world is changing as well is there a risk for the housing market there if the growth of artificial intelligence means there's a whole different array of jobs that are out there?

10:48If you look at the industry over the last 20 years, the industry will have been consistently saying we have a lot of challenges around skills. So the availability of skills in terms of young talent coming into the industry is a challenge. If you look at the volumes that would have come into the industry in the 70s and 80s in terms of bricklayers, electricians, plumbers and so on, people coming in on trade apprentices, then we've seen real challenges in terms of maintaining those volumes. There's a much, much wider range of opportunities for young people, whether it be in terms of further education or different jobs, technology jobs, for example, which wouldn't have existed in the same way in the 70s or 80s.

11:36So attracting people into the industry is a big challenge, one that we feel the industry is really facing into and is trying to. Is it though, I do wonder because you're about the third boss in the space of a week that we've spoken to who've talked about their industry facing challenges in recruitment. At some point, do you sort of not have to go, the industry hasn't either sold itself well enough, it's not providing people with the opportunities in the right places, you're not reaching the people who could be working for you. We are out there, we are recruiting, we are trying to expand numbers that we bring in as we seek to grow the business.

12:19But also we've got to change methods of production. So more factory-based production, we have, and many of the other house builders, have factories for production that 10 years ago we didn't have. producing timber frame for example in factories we've got a center of production and that we're then shipping the frames around the country for production that can make significant changes to what we're doing on site so bringing new technologies into our production line is allowing us to reduce labor content on site so does that mean fewer staff overall fewer workers overall? It will reduce our requirements in terms of on-site employees switching from on-site to off-site in factories.

13:09Because our business is expanding, so we've set out a very clear expansion plan, then we will in overall terms be employing more people. What's the job on-site that you would expect to see fewer of in a few years' time? The big area that we're challenged with on-site is with regard to bricklayers, for example. So that's been called out in a number of studies as being one of our biggest challenge areas. But it's also something that can be replaced by factory production. Correct. And therefore, we can address that. We have a lead time to allow us to address that and therefore looking at alternate solutions to bricks.

13:51But is that OK? I know for bricklayers listening to this, that there may be concerns about what their skills may be required for. But is that just a natural innovation of industry and an example of how something like AI will replace some of those skills? I think that is a reasonable illustration of that. So, you know, you see in production now two things. One is bricklaying robots, which in the UK, I would say, have limited application in residential space. But for commercial buildings where you've got maybe a very long run of bricks to be laid, then robots have been used. And then secondly, using alternate cladding products that are, let's say, brick simulation.

14:40So both of those are innovations. I think if you're a bricklayer looking at that, certainly any time in the near term, there's not going to be any shortage of demand for bricklayers. That landscape isn't going to change dramatically in the short term. but we need to invest in these factories so that in the medium to long term. What is medium term? I would say that five to ten years and then longer term beyond ten years. So I think you'll see a revolution beyond ten years in terms of the way that the industry builds homes on site and the amount of off-site production that takes place. What would your advice be to a 25-year-old bricklayer at the moment?

15:21It's going to be a very, very good career Because when you look at the shortage of bricklayers and you look at the requirements for bricklayers in all respects, I think it would be a long time before you would be predicting that there is actually too many bricklayers for the work that is required. David Thomas, Chief Executive of Barrett Redrow, thank you so much for your time. Thank you very much. So, more discussion to come on the back of that, the housing market. Your thoughts, please, whether it's you work in the building industry yourself. Have you seen some of those moves away from the traditional bricklaying to using artificial intelligence, latest robotics, factory production, whatever that might be?

16:00And, of course, the crucial bit of that conversation that is coming through in a fair few things we're talking about today, prospects for younger people in the housing market. 85058, your experiences. Good morning to you. Wake up to money on BBC Five Live. Thank you for your time this morning. Thank you for your messages. Do keep them coming in about getting on the housing ladder and the ability of a younger person to buy their first home. We've heard how that seems to be getting harder and harder. One of the most challenging times ever. The boss of the biggest householder in the UK telling us this morning.

16:37What is that like? How's that playing out in reality in your families, in your homes, with your children, your grandchildren? and you may be trying to get on the ladder yourself as well. Let me know your thoughts and how the finances flow for something like this. Laura Lambie with us this morning, Senior Investment Director at Rathbones. Laura, how have the house builders been getting on lately? We heard there about the bosses' concerns for younger people buying a home, but actually those companies themselves, they don't just need to sell to younger people, they can sell to anybody. Have they been doing all right of late?

17:16Yes, certainly the political landscape is more supportive of building houses. I mean, this is 20 years of underinvestment in housing. You know, we have a difficult planning system and housing supply has really not kept up with population growth or indeed, you know, quite interestingly, household formation, how that's changed over the last 20 years. So there's a huge amount of headwinds in terms of supplying houses. And I think the attempts by the government to cut down the red tape in planning, hopefully, will encourage more housing. But there's a lot of work to be done. And, you know, the cost of building houses because of inflation and post-pandemic has really increased too.

18:02So it's a bit of a, as I say, a lot of headwinds, but it's looking a bit more encouraging for house builders now. The government said in response to some of those comments from David Thomas of Barrett Red Row, the government told us that they say they're supporting first-time buyers. They've got schemes like the lifetime ISA. They say the number of mortgages given to first-time buyers was significantly more around now than the years after the 2008 financial crisis. Do you see when you look at the numbers, Laura, it being as tough a time as ever? I think so. I mean, David Thomas was talking about interest rates.

18:48When you're assessed for a mortgage, it's the affordability of the repayments. And if the repayments are higher because interest rates are higher, then you're less likely to be able to get enough of a mortgage to fund your house, your first house, let's say. It's also over the years become proportionally more expensive to buy a house in terms of a bigger proportion of your disposable income. And so those two things alone have made it more expensive for everybody to buy housing. Does this filter through into other aspects of business and industry and how the economy is getting on, Laura? So younger people perhaps having the prospect of buying a house at some point on their minds, however many years or decades that might take to save up the deposit and have interest rates at the right level.

19:48When the housing market is so difficult for younger people, how does that have a ripple effect on their confidence to spend in other parts of their lives? Is it that they just write off buying a house and therefore spend more on other things? Or do you actually see that that tightness and squeeze on budgets plays out elsewhere as well? I think it's a slightly different landscape. When I think back, I was 22 when I bought my first house. And it's likely that young people nowadays are going to be in their mid-30s before they actually leave their parents' house and set up a family, and set up a home, whether it's for family purposes or on their own or buying a flat or whatever.

20:39So you're right in terms of their disposable income between the ages of, let's say, 22 and 36 will be spent on other things. I mean, the government is encouraging young people to save in a lifetime ISA, and they will contribute to that too. But you're seeing consumer spend for these young people certainly very much more than it would have been 20 years ago in that age between sort of 22 and mid-30s. So the landscape's changed. But, you know, so consumer demand will probably be supported by that. But it's not good for the overall economy if young people just cannot go on the housing ladder and end up staying with their parents for longer and longer.

21:2385058, do let us know your thoughts on this. We're going to be talking a lot now about getting on the housing ladder. A little bit later, we're going to be talking about careers and prospects after schooling, making a lot of the front pages today as well because of this review. We've got an interim report on this review the government's commissioned into this issue. Some of those headlines that we'll get into a bit later. The Times, over half of NEATs have never held a job. So that's people who are not in education, employment or training. The front of The Guardian has taken the fact that the UK risks a 25 % rise in young jobless.

22:08Taken that from the report. I think The Telegraph has taken a similar thing. Britain's youth crisis as worklessness hits 1.25 million. So it's poised to soar by that nearly a third over the next five years, according to this report. The front of the Daily Mail, Labour risking a lost generation of jobless youth. So do keep your messages coming in about that as well as we get into careers and housing and prospects and the like. Other things for us to discuss as well this morning. I'm talking about spending, Laura. Let's just have a listen to Hollywood Bowls Chief Executive Stephen Burns. So this is the biggest 10-pin bowling operator in the UK.

22:56I was chatting to him yesterday after they had their financial results come out and he told me why he thinks the company's proposition is working at the moment. Customers are always looking for value and what we've tried to do during the course of the last few years is ensure that we remain as accessible as possible to as many people as possible. We've seen frequency broadly stay consistent. I mean, the average customer is bowling 1.3 times a year, so it's relatively low frequency in any event. We find weather is more of a driver of usage than actually anything else that sits alongside it. Spend per game is up and has been in growth for the last few years.

23:32Laura, are you seeing that, is Hollywood Bowl able to take advantage of when people are willing to spend at the moment, when you sort of dig deep in the numbers? Because we often hear of that value proposition from the bosses of businesses where this might be a sort of lower cost luxury as people see some of these things that they're spending their money on. But deep down, the trends behind it all. Yes, we've talked in this programme before about the lipstick effect, that people will buy a lipstick as a little luxury. And I suppose the Hollywood Bowl story is along the same lines. So it's affordable leisure.

24:13It's, you know, whether it's going to the cinema, whether it's going to Hollywood Bowl, whether it's, you know, free museums or whatever, people are looking at things to do that are not too expensive, but that are very pleasant to do. too. Interestingly, you know, the boss of Hollywood Bowl talked about weather dependent, you know, something like the Hollywood Bowl is not weather dependent, whereas many other things, whether it's outside gigs or whatever are, and they're really capitalising, you know, on that. And if you look at what people are not spending money on because of, let's say, higher fuel costs, people are not going abroad, then yes, they're maybe focusing on the smaller ticket items that they can enjoy over the summer without perhaps spending a fortune on either going on holiday or to big theme parks.

25:03And in the hot weather as well, diving inside somewhere for a bit of air con. Laura, have you managed to do that this week? I tell you, it's not something that we need to worry about in Scotland, diving into somewhere air conditioning. Although the weather has been lovely, it's been perfectly, perfectly acceptable and I've been able to sleep at night, unlike many of your other guests. I was going to ask, so what temperatures have you got up to? About 27, I think. But that was during the day. At night, it's still absolutely fine. So I try not to be too jealous, Sean. No, we will not. I thought last night, Laura, was going to be the recovery night of sleep.

25:40But then, you know, as I finally got to sleep last night, it was a restless one, and woke up this morning to the big sounds of thunder. Sometimes you sleep worse in those nights when there's a storm brewing, I think. I don't know what it is. Some clever listeners. Air pressure or, yeah. Yeah, there we go. Who needs a clever listener when you've got a clever investor on the show who knows about these things? Yeah, exactly. Whatever that was, that air pressure, did my head in last night. Anyway, enough about my sleeping habits. I did notice, if anything wants to catch my eye, the Times has got the Sleep Awards 2026, best buys for your bedroom.

26:16I'll be having a bit of a read of that later to see how that can help out. But I wanted to ask you, Laura, about these new trillion-dollar companies that are coming our way. Many might have thought, right, we've sort of established who our big tech companies are, these ridiculous valuations worth trillions of dollars. And in the last few days, we've had a couple more join the list. And they're not sort of the big tech brands that we'd be used to seeing every single day of our lives. But somewhere down the line, we'll be using them, won't we? Well, yes. Many people will not have heard of the South Korean company SK Hynix, who has reached a trillion dollar valuation, along with the US company Micron, which people might have heard of.

27:02So SK Hynix is a big rival of Samsung. So it makes specialist memory chips and it's actually overtaken Samsung in market share in these very specialist memory chips, which have higher margins. And yeah, a very interesting competition war between these two companies. Samsung, interestingly enough, has just managed to prevent an 18-day strike by its workers in its semiconductor division. And they were looking for bonuses of 10.5%, which they've been awarded. And Hynix last year awarded their workers the same. So it's a very competitive industry. And you have to obviously pay your employees particularly well to retain them and to stop them striking.

27:55Trying to get my head around, you know, what a trillion dollar or trillion pound company actually looks like what it's worth. It was interesting when we've had the boss of our biggest house builder on the show today and Barrett Redrow worth sort of two or three billion pounds, it seems, depending on when you look at the business. So, you know, you're talking about hundreds of those size of businesses put together. Imagine you talk about our biggest house builder, you know, 300, 500 of them lined up, and you're only then getting to the value of some of these, you know, memory chip companies, these semiconductor companies, some of the biggest tech companies.

28:41Is that valuation worth it, Laura? When you look at what these tech companies are now worth, do you think, yes, you know, I'd like to buy a piece of that because I think they're going to get even more valuable or return a load of money to me? Well, interestingly enough, we kind of look back, you might not remember this, Sean, but I do, the tech boom of 2000. And we look back and compare valuations now with then. And we have done a bit of analysis on it. And in actual fact, there's very much more fundamental support for these tech companies now than there was for some of the companies that were part of the TMT boom in 2000.