U.K. Home Building Set to Dive 35% on Social Distance Impact
(Bloomberg) -- The U.K. is set to build 35% fewer houses than forecast this year, even as some of the country’s biggest homebuilders plan to return to construction sites, according to an analysis by broker Knight Frank LLP.
With social distancing hitting both construction and demand, the number of private homes built in 2020 is expected to be 56,000 less than the U.K.’s Office for Budget Responsibility predicted last month, according to the analysis.
The knock-on effects of the government’s lockdown measures “cast a dark cloud over the capacity for housebuilders to deliver at scale and speed,” Justin Gaze, head of residential development at Knight Frank, said in the report. “Developers are under increasing pressure to adhere to tight social-distancing controls, while also coping with an ever dwindling availability of skilled workers.”
Persimmon Plc, Vistry Group Plc, Redrow Plc and Taylor Wimpey Plc have said they plan to go back to building sites in some form in the coming weeks. Despite that, housing output is likely to fall even lower than in the years following the global financial crisis, according to the report.
“This is not simply a case of flicking a switch back on,” Knight Frank said. “There are a myriad of issues related to the supply chain, for example, with question marks over the availability of building materials, as well as delivery, distribution and labor.”
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