Covid-19 and the knock-on impact of the government lockdown will result in 56,000 fewer homes being delivered this year, a 35% drop, according to analysis by global property consultancy Knight Frank.
As housebuilders begin to plan their return to work strategies, Knight Frank said it’s latest analysis has revealed the “dramatic impact” Covid-19 has already had on the UK’s construction sector.
The firm’s study into private house building has highlighted that national housing delivery will stand at around 104,000 this year. In London, new housing is set to hit its lowest point since 2014, with 8,000 fewer homes forecasted to be built compared to the five year private housing delivery average, which saw 14,405 completions.
Whilst housebuilding by private developers makes up just one portion of overall housing delivery, Knight Frank said the drop will prove a “significant setback” to the mayor of London’s yearly target of 55,000 new homes.
Knight Frank’s review of pipeline data suggests that (as of 17 April) work had been suspended on residential schemes capable of delivering nearly 250,000 new homes across the UK.
Whilst some of these will be on sites at various stages of completion, and on projects due to be delivered over a multi-year timeframe, Knight Frank said it is”clear” that the building hiatus will have a “sizable impact” on the number of homes built in 2020 and beyond.
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.”
Oliver Knight, research associate at Knight Frank, added: “More intangibly, consumer sentiment will also impact recovery, and the fact remains that housebuilders will only build what they can sell. In the short-term, this will mean giving priority to restarting and completing sites where there are existing customer orders.
“Of course, the key question which will determine the impact is ‘how long’. If Covid-19 disruption is short-lived that could mean the UK can get back on track relatively quickly. However, the longer the disruption the greater the pressure on the market and longer the recovery.”