Housing shapes COVID recovery

Housing shapes COVID recovery

BLOG · BY TTF CEO, DAVID HOPKINS · 18 January

Despite rapidly rising COVID-19 cases, new lockdown measures, and both pre and post-Brexit trading difficulties, most housebuilders appear to have had a good end to 2020. While Q2 2020 put a dampener on the trading year, the market is following an upward trajectory towards full capacity.

The release of Q3 2020 housing data showed 35,710 homes were started in England, an increase of 111% on the previous quarter. Meanwhile, home completions climbed 185% to 45,000. In contrast, new build dwelling starts in England for Q3 2019 were estimated at 39,510, and completions were estimated to be around 46,000. Average House prices in 2020 even climbed to a record high of £253,374, up 6% on 2019, however, the future of the market is uncertain.

Uncertainty for 2021 lies not with the strength of demand, nor likely on the productivity constraints from renewed lockdowns, but with the UK’s employment situation – mass unemployment will affect demand for new build housing more than consumers’ underlying desires to have a new-build home. Though the Chancellor, by extending the furlough and loan schemes to the end of April 2021, seems determined to avoid this kind of situation.

Our members will also note there remain shortages of some materials in the housing market, and we believe the timber market is likely to stay tight at least for the first quarter of 2021 – but this is not yet biting, at least for most large housebuilders.

Looking ahead to 2021 as the number of vaccinated members of the UK public grows and, hopefully, COVID gradually moves to page two news, there will likely be a greater focus on carbon reduction and net-zero. Awareness has certainly increased amongst housebuilders, and politicians will be keen to show both internationally, and to the UK public, that they are serious about taking on climate change ahead of COP26 in November.

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