The UK housebuilding market will not recover until 2026, said property agent firm Savills.
As reported by the Times, Savills has estimated that the volume of houses being built will not go back to pre-pandemic levels before five years and, even then, will still be 20 per cent less than the UK Government’s targets of 300,000 houses a year.
While in 2019 240,000 houses were built in the UK, the numbers started to go down last year, decreasing to 200,000. Savills expects this year’s number to reach a bottom of around 180,000.
The reasons for such a drop are not only related to the pandemic. According to Savills, the number of houses being built started to decrease even before the pandemic hit in March 2020.
Researchers believe that the end of the Help to Buy scheme – which helped first-time buyers get a house with a 5 per cent deposit – might have played a part, as it accounted for 50,000 sales per year.
“Savills land agents reported increased demand for smaller sites that could be completed before the Help to Buy changes throughout 2019, but sites of this type were in short supply,” Emily Williams, an analyst at Savills, told the Times.
In addition to the scheme’s ending in March 2023, other market challenges – including shortages of roof tilers and bricklayers – have created ulterior delays for developers who are already taking on bigger projects that take longer to deliver.
The firm believes that, as the demand for new houses for sale will drop, the renting market will open up creating opportunities for build-to-rent developers.