Table of Contents
Executive Summary
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- Impact of COVID-19 on house building
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- Figure 1: Short-, medium- and long-term impact of COVID-19 on house building, 16 October 2020
- The market
- Market size and forecast
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- Figure 2: Market size and forecast for the UK house building market, 2015-25, (£ billion)
- Market segmentation
- Flat completions
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- 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
Issues and Insights
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- 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
The Market – Key Takeaways
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- 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
Market Size
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- Pandemic disruption shrinks market by a fifth but recovery is already underway
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- Figure 4: Short-, medium- and long-term impact of COVID-19 on house building, 16 October 2020
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- Figure 5: UK new housing output, 2016-20, (£ billion at current prices) [16 September 2020]
- COVID-19 disruption will reverse rising completions
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- Figure 6: UK new permanent dwellings completed annually, 1968-2019, (dwellings completed)
Market Segmentation
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- COVID has evenly impacted public and private segments
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- Figure 7: UK new housing output, public and private segments, 2016-20, (£ billion at current prices)
- Private tenure completions maintain upwards trend
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- Figure 8: UK new permanent dwellings completed annually by tenure, 1968-2019, (dwellings completed)
- House prices are driving a generational shift away from flats
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- Figure 9: Share of new annual completions by housing type, 2009/10-2019/20, (% of completions)
- Segmentation by region
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- Figure 10: New housing output by region, England, Q1 2007 – Q4 2019, (£ million)
- Segmentation by nation
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- 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)
Market Forecast
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- Postponed work and resumption of new orders to drive post-lockdown growth
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- 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
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- 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
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- Figure 15: UK new housing forecast, public and private segments, 2021-25, (£ billion)
Market Trends
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- A sharp recovery and increased commitment prevents house price decline but reductions are still expected
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- 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
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- 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
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- 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
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- Figure 21: Annual completions and total value of properties sold through Help to Buy, 2013-19, (number of completions and total value in £ billion)
Market Drivers
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- Government policy has improved supply but affordability challenges remain
- Affordable Homes Programme
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- 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
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- Figure 23: UK monthly interest rates on mortgages to households, all UK monetary institutions excluding central bank, January 2014 – September 2020, (%)
Companies and Brands – Key Takeaways
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- Contrast between employment and turnover structure highlights importance of independent contractors
- Rise in order book sizes highlights signs of strong recovery despite disruption
Industry Structure
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- Changes in industry structure
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- 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
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- 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
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- 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)
Company Profiles
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- Barratt Developments
- Recent company activity
- Financial information
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- Figure 30: Financial analysis of Barratt Developments, 2016-20, (£ million and % annual change)
- Bellway
- Recent company activity
- Financial information
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- Figure 31: Financial analysis of Bellway, 2015-19, (£ million and % annual change)
- Berkeley Group
- Recent company activity
- Financial information
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- Figure 32: Financial analysis of Berkeley Group, 2016-20, (£ million and % annual change)
- Persimmon
- Recent company activity
- Financial information
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- Figure 33: Financial analysis of Persimmon, 2015-19, (£ million and % annual change)
- Taylor Wimpey
- Recent company activity
- Financial information
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- Figure 34: Financial Analysis of Taylor Wimpey, 2015-19, (£ million and % annual change)
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
Further Sources and Contacts
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- Trade associations
- Trade magazines
- Trade events
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