September records to pre-lockdown output, but the number of completed homes is still down on last year ..
The number of new homes being completed jumped by nearly 50% in the third quarter of this year as the construction industry began its recovery following the first coronavirus lockdown.
Nearly 30,000 new properties were finished during the three months to September, up from just over 20,000 in the previous quarter, according to NHBC, which provides insurance warranties for new homes.
While the increase in homes being built was encouraging in the third quarter, the total for 2020 is still the second-lowest rate of new build completions since 2012 when the sector was reeling from the financial crisis.
The current total of new properties completed so far this year stood at 83,359 at the end of September, which is 30% lower than for the same period of 2019.
Steve Wood, chief executive of NHBC, said: “The Covid-19 pandemic delivered a sharp shock to the housing market in the second quarter of 2020.
“It is encouraging that by early summer house builders had established Covid-secure operating practices and had moved closer to pre-lockdown productivity levels by the third quarter.”
Why is this happening?
The housebuilding industry was hit hard by the first coronavirus lockdown, which led to work on construction sites being suspended.
Building has since been allowed to resume, following the introduction of new measures to keep workers safe from the virus.
Even so, output levels would have to double in the final quarter for the total number of homes completed this year to be on a par with 2019.
Who does it affect?
With demand fornew build homes currently high, the lower level of completed builds will be disappointing for many potential buyers, but the issue is particularly worrying for people who are hoping to use the government’s Help to Buy scheme.
The initiative enables people to purchase a new build property with just a 5% deposit, which the government tops up with a 20% five-year interest-free equity loan, but the scheme in its current form is due to end on 31 March 2021, after which it will only be available to first-time buyers. The government has extended the deadline by which properties must be finished in order for them to qualify for the existing version of the scheme to 28 February 2021, with the date for legal competition remaining unchanged at 31 March 2021.
What’s the background?
Out of the nearly 30,000 homes finished during the third quarter, 18,319 were for private sale, with the rest either affordable homes or ‘build to rent’ properties.
Building levels were highest in the South East, with a total of 4,072 properties finished in the region in the three months to the end of June, followed by the East at 3,228 and the North West at 3,631.At the other end of the scale, only 798 homes reached competition in Northern Ireland and just 864 in Wales.
The types of properties being constructed were fairly evenly split between detached homes, semi-detached houses and apartments, all at around the 8,400 mark, with 3,751 terraced properties and 465 bungalows also built.