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HOW FAR AWAY FROM HITTING THE GOVERNMENT HOUSING TARGETS ARE WE REALLY?

As 2020 dawned, so did the milestone deadline the Government set for housing in the UK. In 2015, they famously set the target for 1 million new homes to be built across the country by the end of 2020 in order to combat the ever-increasing supply and demand crisis facing the UK. As the years progressed however, it became clear that not only were we far from reaching this milestone, 1 million new homes were simply not enough and so they pledged another 500,000 homes by 2022.

In order to meet this 1.5 million homes target, it was estimated that the UK would need to have approximately 300,000 new homes built every year, so how far away from that target are we really?

According to Government statistics, in the year 2018-2019 we saw house building in the UK reach a 30 year high with 241,130 homes completed. While this number is indeed encouraging, it is still not enough, and this throws into sharp relief the simple fact that we have a long way to go if we have any hope of meeting the Government’s house building targets.

So why aren’t we hitting these targets on time?

Developers across the UK are facing many barriers to building. The first, and possibly most obvious barrier, is also the most recent complication to befall the construction industry and that is, of course, the onset of the COVID-19 pandemic. As the world was plunged into chaos at the beginning of the year, the construction industry ground to a halt and all development was paused during the period of Government imposed lockdown. This has of course had a detrimental effect on the number of new homes started and completed in 2020 so far, and we will no doubt see a record low in housing figures for Q2.

A shortage of suitable land being identified for development is a further problem for developers. While the Government have put in place new steps to ensure brownfield land across the country is released for development, little has been done to increase the number of greenfield sites that are being identified as suitable. Until there are new steps in place to speed up the planning process and ensure that enough land is being made available for residential development, house builders may still lag behind target.

Before the onset of COVID-19, the biggest concern for many house builders was Brexit and the effect it may have on the construction industry – namely how this would negatively impact the existing lack of skilled workers and materials. Those workers in EU countries may no longer be able to continue working in the UK, causing developers to work at a reduced rate due to a lack of staff, while the materials shortage could cause further delays on completion of builds as developers wait for them to become available.

It is clear to see that we are still some way off from hitting the 1.5 million homes target, and while the true effects of COVID-19 on the industry remains to be seen, the industry will have to adapt new modes of development in order to speed up the completion rate across the country and provide the homes so desperately needed.

 

This article is for educational purposes only and does not constitute investment advice. This article does not amount to an invitation or inducement to buy or sell an investment nor does it solicit any such offer or invitation in any jurisdiction.

In all cases, readers should conduct their own investigation and analysis of the data in the article. Readers are strongly encouraged to seek independent legal and financial advice when considering an investment in strategic land. All statements of opinion and/or belief contained in this article and all views expressed and all projections, forecasts or statements relating to expectations regarding future events represent Intro Crowd’s own assessment and interpretation of information available as at the date of this article.

No responsibility or liability is accepted by Intro Crowd for reliance on the contents of this article.

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