Lee Martin, Head of UK for property development optimisation platform Unlatch, has suggested that the housebuilding sector is already showing signs that it is set to rebound from a decline in pandemic output.
The housebuilding sector was hit hard by Covid-19 following an initial industry lockdown, and a return to the workplace was made all the more difficult due to the daily updates to Covid protocols, a severe shortage of labour, and an increase in the cost of materials that had been steadily building since Brexit.
As a result, 2020 saw the value of construction output delivered via the housebuilding sector fall considerably.
Construction output still hit a respectable £37.8bn over the course of the year, though this was the lowest annual total recorded since 2016. Not only this, but it marked the first annual decline in the value since 2012, a hefty -21% drop when compared to 2019.
To put this decline into perspective, the only other annual dip recorded since 2010 was a -5% decline in 2012. Between 2010 and 2019, the sector had managed an 11% average annual rate of growth and even with this disastrous pandemic dip, it finished the decade with values still averaging an 8% annual increase.
According to Martin, this was a decline felt across the board, although it was more pronounced in the public sector with values declining -32% in a year versus a drop of -19% across the private sector.
Based on this value and the number of new dwellings completed, the average price per dwelling sat at £221,594 – down -3% on the previous year and the lowest value seen since 2017.
On the positive side, however, Martin adds that 2020 did suggest some strong signs of future growth. To begin with, there were 47,763 house building sector firms operational across Britain. This figure has not only climbed 5% on 2019 levels, but has grown at an average annual rate of 6% over the last decade and is the highest level on record during this period.
Not only are there more firms in operation, but they are employing more people. 230,000 in 2020 to be exact, again marking a 3.5% jump on the previous year and the highest level on record in the last decade.
Martin suggests that these are not indicators of a sector that is on its knees and in need of help. Rather, a sector that has weathered the storm by preparing itself for sunnier days.
Now that those days have arrived, Martin hopes the decline in output seen during 2020, this pandemic blip, this historic anomaly, will be resigned to the record books, as the sector once again gets Britain building for a better future and delivers the new homes it so sorely needs.
