House Building: Inc Impact of COVID-19 - UK - October 2020

OVERVIEW
Key issues covered in this Report
COVID-19: Market context
Economic and other assumptions
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
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
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
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)
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)
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)
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)
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, (%)
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
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)
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)
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
FURTHER SOURCES AND CONTACTS
Trade associations
Trade magazines
Trade events