You are here: Home - Mortgages - First Time Buyer - News -

Housebuilding forecast to fall 35 per cent in 2020

Lockdown measures to keep the public safe from the spread of Covid-19 will reduce the number of new private sector built homes in 2020 by 35 per cent, according to Knight Frank.

Around 104,000 private homes will be built this year, 56,000 fewer than there would have been if the coronavirus pandemic had not brought the country to a standstill, the estate agent estimated.

According to Knight Frank’s prediction, housing delivery for 2020 will be lower than in the years that followed the financial crisis in 2007.

In London, Knight Frank expects 8,000 fewer homes to be built taking private housing delivery to its lowest level since 2014.

The estate agent said its discussions with major housebuilders in recent weeks had pointed to a 35 per cent decline in planned construction for the year, which according to the Office for Budget Responsibility’s (OBR) pre-Covid forecast was 160,901 private housing completions.

Housebuilders have already begun to put in place their return to work strategies.

Taylor Wimpey is to reopen the majority of its building sites on 4 May to phase back construction work.

But Knight Frank says Covid-19 has already had a dramatic impact on the construction sector and restarting work was not like “flicking a switch back on”.

250,000 homes stopped

The estate agent’s analysis of pipeline data suggests that as of 17 April work had been suspended on residential schemes capable of delivering nearly 250,000 new homes.

Some of these sites, however, will be at different stages which may not all complete in the same year.

The government’s guidance says construction sites can stay open as long as social distancing measures are observed, but many developers have chosen to shut sites to protect workers.

The supply chain builders rely on to deliver homes has also been disrupted, affecting their ability to complete sites.

Justin Gaze, head of residential development land at Knight Frank, said: “Faced with supply chain challenges and a national material shortage, developers are under increasing pressure to adhere to tight social distancing controls, while also coping with an ever dwindling availability of skilled workers.

“This has cast a dark cloud over the capacity for housebuilders to deliver at scale and speed.”

Extend Help to Buy

Several measures have been called for by the industry to kick start the delivery and sale of new homes when lockdown restrictions are eased.

The Home Builders Federation has been in talks with the government over plans to extend the Help to Buy scheme, introduce a stamp duty holiday and use a co-ordinated approach to re-opening the housing market so that all members of the supply chain are allowed to restart business at the same time.

The government has yet to commit to any of the proposals.

“Now is the time for the government to intervene and support the private sector in getting building again,” said Gaze.

“These measures would no doubt act as a real driver for the wider UK economy; helping to create jobs, new housing and ultimately receipts for the treasury via increased liquidation in the market.”

The government’s next review of the UK’s lockdown restrictions is planned for 7 May.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week