2020
9
UK House Building Market Report 2020
2020-11-05T03:03:32+00:00
OX989484
1495
127038
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Report
en_GB
“Despite significant disruption due to COVID-19, activity in the UK house building market has recovered substantially, with minimal effect on the underlying strength of the market. Demand continues to be…

UK House Building Market Report 2020

£ 1,495 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK House Building market including the behaviours, preferences and habits of the consumer.

The conclusion of the December 2019 election and the passing of the Withdrawal Agreement in January 2020 helped to recover market confidence, driving a rapid jump in prices, peaking at 3% in March 2020. This recovery was cut short by COVID-19, but the pandemic’s impact has been short-lived relative to other parts of the economy.

Mintel estimates the market to decline by 21% to £38.2 billion in 2020, primarily driven by the collapse of activity during Q2 2020 due to the initial lockdown, beginning 23 March 2020.

Although government measures advised that construction sites could remain open provided they met Construction Leadership Council health guidance, the majority of housebuilders stopped on-site operations due to initial difficulties in enforcing social distancing measures. COVID-19 is also driving a dramatic shift in favour of agile and remote working practices, as businesses contend with the costs associated with social distancing measures and financial pressures resulting from subdued economic activity.

As demand for office and commercial property in inner-city areas declines, we anticipate demand to grow for developments in city peripheries and commuter hubs where land and house prices are lower. Demand is also expected to rise in ‘second-tier’ cities as the growth of remote working enables a greater proportion of first-time buyers to expand their property search further from their place of work. This rebalancing will lead to opportunities for new residential properties in inner-city areas, where the attractiveness of land and property will face decreased demand in the short and medium term.

Read on to discover more details or take a look at all of our UK B2B and Industrial market research.

Quickly understand

  • The impact of COVID-19 on the house building market.
  • How COVID-19 may drive a structural change in the market as the popularity of retail and office property in cities declines.
  • Trends in the housing market by region, nation and property type.
  • How political and economic trends have shaped the state of the market and government responses to issues surrounding supply and affordability.
  • The role of Help to Buy in the market and the anticipated effects of changes set to be introduced in 2021.

Expert analysis from a specialist in the field

Written by Francesco Salau, a leading analyst in the Industrial sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Despite significant disruption due to COVID-19, activity in the UK house building market has recovered substantially, with minimal effect on the underlying strength of the market. Demand continues to be restricted by prices, however, particularly in prime markets such as London and the South East, despite the government’s success in increasing supply over the last decade.
Francesco Salau
Industrial Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
  2. Executive Summary

    • Impact of COVID-19 on house building
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on house building, 16 October 2020
    • The market
    • Market size and forecast
      • Figure 2: Market size and forecast for the UK house building market, 2015-25, (£ billion)
    • Market segmentation
    • Flat completions
      • Figure 3: Share of new annual completions by housing type, 2009/10-2019/20, (% of completions)
    • Companies and brands
    • Rising order books point to quick recovery
  3. Issues and Insights

    • Shift to remote working may synergise with planning reforms to open path for inner-city redevelopment
    • Economic effects of COVID-19 and Help to Buy changes may push developers to focus on cost reduction
  4. The Market – Key Takeaways

    • House building market sees output drop by a fifth due to COVID-19
    • Scotland and Wales lead as public investment ramps up
    • Affordability issues are raising the age of first-time buyers and shifting property preferences
    • Reforms promise to improve planning process through simplification, standardisation and digitisation
  5. Market Size

    • Pandemic disruption shrinks market by a fifth but recovery is already underway
      • Figure 4: Short-, medium- and long-term impact of COVID-19 on house building, 16 October 2020
      • Figure 5: UK new housing output, 2016-20, (£ billion at current prices) [16 September 2020]
    • COVID-19 disruption will reverse rising completions
      • Figure 6: UK new permanent dwellings completed annually, 1968-2019, (dwellings completed)
  6. Market Segmentation

    • COVID has evenly impacted public and private segments
      • Figure 7: UK new housing output, public and private segments, 2016-20, (£ billion at current prices)
    • Private tenure completions maintain upwards trend
      • Figure 8: UK new permanent dwellings completed annually by tenure, 1968-2019, (dwellings completed)
    • House prices are driving a generational shift away from flats
      • Figure 9: Share of new annual completions by housing type, 2009/10-2019/20, (% of completions)
    • Segmentation by region
      • Figure 10: New housing output by region, England, Q1 2007 – Q4 2019, (£ million)
    • Segmentation by nation
      • Figure 11: UK new housing output by nation, 2015-19, (£ million and annual % change in output)
      • Figure 12: Share of UK national new housing output, segmented by public and private sector, 2018-19, (% share of output)
  7. Market Forecast

    • Postponed work and resumption of new orders to drive post-lockdown growth
      • Figure 13: UK new housing output forecast, 2020-25, (£ billion, 16 October 2020)
    • Stable registrations will serve as a reserve of activity once barriers to industry operations lift
      • Figure 14: UK annual new home registrations, 2010-19, (number of new home registrations)
    • New public investment unlikely to shift focus from private sector activity
      • Figure 15: UK new housing forecast, public and private segments, 2021-25, (£ billion)
  8. Market Trends

    • A sharp recovery and increased commitment prevents house price decline but reductions are still expected
      • Figure 16: Annual change in UK average house prices, all property types, September 2016-June 2020, (% annual change)
      • Figure 17: UK average house price, all property types, June 2012-20, (£ at 2016 prices)
    • Long-term rise in detached and semi-detached registrations highlights market-driven shift in preferences
      • Figure 18: UK new home registrations by property type, 2010-19, (number of registrations)
      • Figure 19: Change in annual registrations by house type between 2010 and 2019, (% change)
    • Declining office and retail space use opens the door to residential redevelopments
    • Remote working is most prevalent in regions home to high-value service sectors
      • Figure 20: Proportion of UK employees that have ever worked from home by occupation group and occupation group as a proportion of all employees in the UK, 2019, (%)
    • Help to Buy
    • Criticisms of Help to Buy
    • The end of Help to Buy
      • Figure 21: Annual completions and total value of properties sold through Help to Buy, 2013-19, (number of completions and total value in £ billion)
  9. Market Drivers

    • Government policy has improved supply but affordability challenges remain
    • Affordable Homes Programme
      • Figure 22: Share of UK new home registrations, private vs affordable and rental sector, 2010-19, (% of registrations)
    • Planning for the Future white paper
    • Recent changes
    • Upcoming changes
    • Low interest rates continue to support the housing market
      • Figure 23: UK monthly interest rates on mortgages to households, all UK monetary institutions excluding central bank, January 2014 – September 2020, (%)
  10. Companies and Brands – Key Takeaways

    • Contrast between employment and turnover structure highlights importance of independent contractors
    • Rise in order book sizes highlights signs of strong recovery despite disruption
  11. Industry Structure

    • Changes in industry structure
      • Figure 24: Analysis of changes in ‘development of building project’ activities, 2015-19, (number of outlets and businesses)
      • Figure 25: Analysis of changes in ‘construction of residential and non-residential buildings’ activities, 2015-19, (number of outlets and businesses)
    • Changes in employment structure
      • Figure 26: Analysis of the employment structure of ‘development of building project’ activities, 2018 and 2019, (number of outlets)
      • Figure 27: Analysis of the employment structure of ‘construction of residential and non-residential buildings’ activities, 2018 and 2019, (number of employees and number of businesses)
    • Changes in turnover structure
      • Figure 28: Analysis of the turnover structure of ‘development of building projects’ activities, 2018 and 2019, (£’000, number of businesses)
      • Figure 29: Analysis of the turnover structure of ‘construction of residential and non-residential buildings’ activities, 2018 and 2019, (£’000, number of businesses)
  12. Company Profiles

    • Barratt Developments
    • Recent company activity
    • Financial information
      • Figure 30: Financial analysis of Barratt Developments, 2016-20, (£ million and % annual change)
    • Bellway
    • Recent company activity
    • Financial information
      • Figure 31: Financial analysis of Bellway, 2015-19, (£ million and % annual change)
    • Berkeley Group
    • Recent company activity
    • Financial information
      • Figure 32: Financial analysis of Berkeley Group, 2016-20, (£ million and % annual change)
    • Persimmon
    • Recent company activity
    • Financial information
      • Figure 33: Financial analysis of Persimmon, 2015-19, (£ million and % annual change)
    • Taylor Wimpey
    • Recent company activity
    • Financial information
      • Figure 34: Financial Analysis of Taylor Wimpey, 2015-19, (£ million and % annual change)
  13. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
  14. Further Sources and Contacts

    • Trade associations
    • Trade magazines
    • Trade events

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

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*databooks not available with UK B2B Industry reports.

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