The past 12 months have been challenging times for the UK economy. Many businesses have faltered and the outlook for entire sectors has been grim. Now, with vaccination programmes in full effect, there are signs – albeit cautious signs – that we might soon be on the road to recovery. The construction sector in particular is starting to show green shoots and housing construction looks like it could lead the way for economic recovery overall.
Green shoots for construction companies
The most recent data from the Office for National Statistics (ONS) has revealed that there has been an uptick in construction activity. Construction output rose by 0.9% in the month-on-month all work series in January 2021. That may not sound like a particularly impressive figure but when compared to the fall of nearly 3% in December last year it’s clear why there are already signs of hope. New work increased by 1.7% in January this year, driven largely by private commercial and infrastructure construction. While there was a drop in output compared to February 2020 (a time when the impact of the pandemic had yet to be felt for many) repair and maintenance work was 4.5% above the level last year, despite a monthly fall.
New private housing construction
What’s key to note here is the slight rise in new private housing construction, which is being attributed to some recovery in the property market as more buyers look to purchase. In response to higher rates of buyer activity there has also been an uptick in developer enthusiasm to push ahead with projects in order to take advantage of this increased interest from buyers. Given that the stamp duty holiday has now been extended until June it’s highly likely that this upward trajectory could continue as housing construction continues to lead the way to recovery.
Strong buyer activity – for now
The stamp duty holiday – and the tapering off in September – could provide an additional incentive for all those in the housing market to push for completion in the coming months. We are also seeing the effects of the pandemic having an impact on the housing market with some of the increase in activity being generated by buyers who are looking to move to bigger properties with more outside space. The fact that buyers are now much more willing to move to different areas could see this spike in demand spread across the country, rather than being concentrated in areas where there is traditional high need, such as London. However, there is also some hesitancy about whether this trend will continue into the long term and much of this depends on COVID-19. We are at a stage where we have only just begun the roadmap out of lockdown and plenty could go wrong in the coming months that mean buyers take a step back from completing. So, the continued construction housing boom depends very much on the steps the government takes next.
Housing construction is currently experiencing a positive boost as the number of buyers continues to increase and developers rush to keep up.
At RG Group we are currently active in a variety of residential projects. We would love to consult with you about construction management of your upcoming residential projects.
