The coronavirus pandemic has sent shockwaves across the globe. There was no way of anticipating a global disaster on this scale at the beginning of the year, and it is equally difficult to forecast the long-term effects the pandemic and subsequent lockdown will have on the global economy, or indeed on individual industries such as housing and construction.
2019 was a slow year for UK house building, with figures reported pre-Q4 suggesting a 7% decrease in the number of new build homes across the country and completions only numbering 178,000. This, on the dawn of the Government’s 1 million homes deadline, did not bode well for the current supply and demand crisis – however figures released at the beginning of 2020 suggested a brighter outlook from Q4 with an increase both in the number of new starts and the number of completions.
The outlook was positive going into 2020 – another year to increase the supply of homes and another chance to hit that crucial 1 million target - however construction across the country ground to a halt in response to the coronavirus pandemic and at the time of writing, house builders are only just starting to go back to work after a seven week enforced break.
So, how could the lockdown affect housing in the UK this year?
We will inevitably see a decrease in year on year figures for Q1 and into Q2 in 2020. With no developers able to work on sites, the number of new starts and completions will both suffer, however we may see a renewed vigour amongst house builders to complete sites and make up for lost time as the restrictions are eased. Hopefully we will see these numbers begin to even out towards the second half of the year, and potentially even see an increase in the number of homes built during Q3 and Q4.
This still relies upon a regular supply of materials however, and with international travel restrictions still in place, it is unclear how this will affect importation of materials moving forward. A lack of suitable materials is already a recognised barrier to building for many developers and was a key cause of concern during the Brexit discussions, so it is possible that the ongoing restrictions could place further strain on the construction industry this year.
Of course, at the time of writing there is no hard evidence to support any claims as to how the housing industry will perform this year. While we await to see what happens with the COVID-19 pandemic, we can merely speculate as to the wider effects it will have on the country – one thing remains certain however, whatever happens, the UK is still in need of new housing and that appetite will not go away.
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