House Building booms

House Building booms

In today’s post, we will see that despite the surge in housebuilding, the supply keeps on reducing and rising in cost. A building firm went bankrupt and the construction of nearly 200 homes for North East Derbyshire District Council (NEDDC) in Tupton has been stopped. The Federation of Master Builders (FMB) stated that Lee Rowley, a well-known personality in the building industry, can champion the nation’s small, local builders. The construction of a $65 million project at Salford University has been completed and will soon be opened. The building and construction industry has been slow to adopt advanced technology and participate in digital transformation. How exactly can augmented reality revolutionise the construction industry?

House Building booms, but insufficient supply drives up costs
Original Source: Housebuilding surges but insufficient housing supply continues to drive up house prices

Latest data reveals the number of new home sites rose 15% in the second quarter of 2018 compared to the same period in 2021.

51,730 dwellings were started in April to June, according to the Office for National Statistics.
However, the increase came after a large decline in construction levels during the Covid pandemic (2020-2021), when housebuilding levels were on pace with the 2008 financial crisis, which hurt housebuilders and the housing market. Net increase in UK homes declined 11% from 2019-2020 to 2021-2020 as construction recovered from the Covid-19 epidemic.
The number of completed homes grew 6% from April, May, and June last year to 44,940. It was 3% higher than in the prior quarter.
Despite an increase in housebuilding, the UK government’s objective of 300,000 new homes per year is still far behind.
The lack of housing stock continues to push up home prices in many areas.
The ONS reported that residential property prices rose 15.5% in July, although economists predict growth to slow in the coming months.
Peak Money’s managing director, Rhys Schofield, said the UK needs to build 340,000 additional houses a year until 2031. The government’s goal is 300,000 a year.
“These latest data fall short, therefore home prices can only go one way. Due to a lack of urgency in housebuilding, many people can’t afford a place to live.”
The price of construction materials in the UK may potentially be hurting housebuilding. ONS: UK construction material prices in July 2022 were 24.1% higher than a year earlier.
Edgar Rayo, chief economist at Finanze, said the statistics show build-cost inflation.
“Soaring building costs due to supply chain difficulties and fuel price hikes continue to strain property developers’ profit margins in the UK.”
“As we follow the housing market imbalance, we still see significant demand, which puts pressure on prices.”