New build starts in 2019 were just 151,000 and completions 179,000. With Covid costing an estimated 50,000 plus homes this year, the government's target of 250,000 per annum is looking steadily more remote. The housing shortage continues to deepen.
Along with so much of the country's economy. the construction industry all but closed down in the last week of March, with major housebuilders such as Barrett and Persimmon deciding to suspend activities. Other construction companies stayed on site, but with work substantially scaled back to conform with social distancing guidelines.
It is tempting to blame the coronavirus pandemic for a shortfall in new home completions this year, Whilst this will undoubtably be true, data from the Office of National Statistics shows that construction was already slowing rapidly.
The number of new homes completed in 2019 was 179,000, but this reflects the sentiment a year earlier. The number started during the same period was 151,000, 10% down on 2018.
Many of those new starts will simply not be delivered during 2020. Analysis by Knight Frank suggests that the shutdown could result in the number of house completions falling by up to 56,000 this year.
Many companies are preparing a phased return during May, but the pace of construction will be markedly slower than before -
Faced with supply chain challenges and a national material shortage, developers are under increasing pressure to adhere to tight social distancing controls, while also coping with an ever-dwindling availability of skilled workers. This has cast a dark cloud over the capacity for housebuilders to deliver at scale and speed. This is not simply a case of flicking a switch back on.
The numbers from 2018 ans 2019 demonstrate that achieving the government's target of 250,000 new homes per year was already in trouble. Coronavirus makes the situation even worse. It appears that only massive intervention can get delivery remotely close to that number.