The construction industry defies Brexit bashers on all levels
In 2015, the government set a target of building one million new homes by 2020. For three years, it looked like this target would be missed by a mile. Adding to the pessimism, the June 2016 vote to leave the EU was forecast to squeeze the life out of the construction industry by sucking out EU-born workers. Just two years after the EU referendum and two years before the target deadline, the industry is reporting a complete turnaround.
This article highlights the good news recently delivered by the Ministry of Housing, Communities and Local Government, and the Home Builders Federation (HBF).
New home completions soar in the UK
Reporting on the numbers of new home completions are soaring. In the fourth quarter of 2017, they hit 42,860. That’s:
- 7% higher than the third quarter figure
- A whopping 17% higher than the same quarter of 2016
Over the year, new build completions were 163,250. That’s 16% more than were completed in 2016.
New build starts are rising, too
The Ministry of Housing, Communities and Local Government figures also give an insight into the future:
- New builds start in 2017 were 162,180
- New build starts in 2017 were 5% higher than in 2016
- Crucially, new build starts increased by 5% in the fourth quarter compared to the third quarter
Though still below the peak of new starts (in the March quarter of 2007), new build starts are now 141% above the trough in the first quarter of 2009. And all sectors improved their performance in the final quarter of 2017 compared to the previous quarter:
- Private enterprise new build starts increased by 8%
- Private enterprise new build completions increased by 7%
- Housing association new build starts were 2% higher
- Housing association new build completions were 2% higher
The UK is now on target to build a million new homes by 2020
In its most recent industry report, the HBF says that the industry it represents is now on target to build one million homes by 2020. This should help ease the housing crisis in the UK, especially as the report also highlights that:
- Supply is now up 74% in four years
- Quality of build continues to improve
- Private sector builders are providing 50% of all affordable housing delivered
The construction industry is employing tens of thousands of new recruits
Contrary to the views of many experts prior to and immediately post the EU Referendum, the construction industry does not appear to be suffering from a shortage of workers, a fall in demand, or a collapse in values. Indeed, the HBF report also details how the industry is recruiting tens of thousands of new employees, as it gears up to deliver 300,000 new build completions each year by the mid-2020s. Discussing the report, HBF Executive Chairman Stewart Baseley said:
“The Government has quite rightly recognised the social and political need for them to address the chronic housing shortage we face. Housebuilders have risen to the challenge and delivered huge increases in supply, whilst providing increasing contributions to local infrastructure, amenities and affordable housing.
“At the same time, the industry has invested hugely in training, recruitment, and land to ensure it is geared up to deliver Government promises. The industry has also reacted decisively to reverse the slight, but unacceptable falls in customer service and quality, something that takes a commitment from board level down.”
Wages are rising in construction
As more people are recruited into the construction industry, and property developers begin to work more closely with local authorities (who now have a remit to release land and speed up the planning process), the Office of National Statistics has reported that wages in the industry are rising faster than in any other sector of the UK economy.
Average weekly wages are now £606, up by 5.2% since the EU Referendum. Bricklayers at small developers now earn an average of £42,034 per year, and in London, this can rise to around £90,000 per year.
The challenge for property developers over the next few years could be the shifting from building new homes in high volumes to selling them. Castlereach is here to help you overcome the sales challenge. Call the Castlereach team on 0207 923 5680, and discover how we reach the property investors that will help your property sales numbers keep pace with your new build start and completion targets.
Live with passion
Brett Alegre-Wood