Construction News

Mon October 26 2020

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Second quarter housing starts fall 52%

1 Oct Latest housing statistics from the government reveal that new-build starts and completions in England reached their lowest level for at least 20 years in the second quarter of 2020.

On the back of the Covid-19 crisis, the number of dwellings where – according to building control figures – building work has started on site was 15,930 between April and June 2020. This was a 52% decrease when compared to the previous quarter (Q1 2020).

The number of dwellings completed on site in the second quarter was 15,950, down 62% on Q1.

These numbers, collated by the Ministry of Housing, Communities & Local Government, are for England only.

Starts are 67% below their Q1 2007 peak and are 7% below the previous trough in Q1 2009. It is the lowest quarterly starts figure in the seasonally adjusted time series (which begins in the year 2000).

There were 121,630 estimated new build dwellings starts in the year to June 2020, a 26% decrease compared to the year to June 2019.

An estimated 147,180 new build dwellings were completed in the year to June 2020, a decrease of 15% compared to the year to June 2019.

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Data from MCHLG
Data from MCHLG

Clive Docwra, managing director of construction consultancy McBains, said: “Today’s statistics bear out the huge impact that Covid-19 – and in particular the spring lockdown – has had on housebuilding rates.  The government target of building a million new homes in the next five years was always going to be a steep challenge, but the pandemic has dealt a heavy blow to that ambition.

“The industry is now facing a double-whammy – trying to recover from the impact of Covid but also suffering from the uncertainty over a Brexit deal – with investors holding off putting money into new developments until the picture on a withdrawal agreement becomes clearer. The government will no doubt point to its recent planning White Paper as the answer to building more homes, saying that it will mean ‘permission in principle’ will be given to developments on land designated for renewal to speed-up building, but the uncertainty and resulting fluctuating values driven by Covid and Brexit are reducing the incentive on developers to build in the short term.

“The government could address this by temporarily staggering or deferring Section 106 planning obligations – where developers are asked to provide contributions for community infrastructure – so that developers are encouraged to complete housebuilding projects as soon as possible.”

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