Forget house-building targets - new homes delivery takes 35% hit

There’s going to be a 35 per cent drop in the number of new homes delivered this year because of the Coronavirus crisis.

That’s the prediction of Knight Frank, which says national housing delivery will hit just 104,000 this year. 

Specifically in London, new housing is set to hit its lowest point since 2014, with 8,000 fewer homes than the five-year private housing delivery average, which saw 14,405 completions. 

Whilst housebuilding by private developers makes up just one portion of overall housing delivery, Knight Frank says the drop will prove a significant setback to the Mayor of London’s yearly target of 55,000 new homes.

Knight Frank’s review of pipeline data suggests that, as of 10 days ago, work had been suspended on residential schemes capable of delivering nearly 250,000 new homes across the UK. 

Official guidance advises that construction sites can stay open, as long as social distancing protocols are adhered to; many housebuilders, however, have opted to shutter sites through the lockdown to protect workers, as well as a result of supply-chain difficulties.

Oliver Knight, a research associate at Knight Frank, is warning that consumer sentiment will also impact recovery.

“The fact remains that housebuilders will only build what they can sell. In the short-term, this will mean giving priority to restarting and completing sites where there are existing customer orders. Of course, the key question which will determine the impact is 'how long'. If Covid-19 disruption is short-lived that could mean the UK can get back on track relatively quickly. However, the longer the disruption the greater the pressure on the market and longer the recovery” he cautions.