Experian report forecasts a 6% dip in completions before matters start to improve in 2020

housebuilding

Despite the urgent need for new homes for the less well-off across the UK growth in the number of dwellings being built for social rent is expected to slide this year, according to new figures from Experian.

While the removal of the local authority housing cap last October would prove to be a “game changer” for the social housing sector, Experian said both output and new orders faltered last year, “suggesting that a significant increase in activity may be a little way off”.

In terms of social housing starts the social sector is expected to grow 1.2% this year after an 8.5% increase in 2018. Growth is then forecast to perk up to 3% in 2020 and see a hefty leap in 2021 of nearly 15%.

Completions in the social housing sector were likely to fall 6% this year, then recover by 3% next year and 11% in 2021.

Private housing starts would rise nearly 2% in 2019, then 2.5% in 2020 and 2021, while completions would be broadly similar to starts, Experian predicted.

And the research firm said after a couple of years of strong performance, growth in the value of total housing output would fall from 4.2% last year to 1.7% – £43bn – in 2019.

UK housing starts and completions
000s    Est.Forecasts
 20142015201620172018201920202021
Private housing                
Starts 131.2 141.5 149.2 156.3 157.2 160 164 168
Completions 110.4 129.3 133.8 153.4 152.8 156 160 164
Social housing                
Starts 33.2 31.6 31.9 34.6 32.6 33 34 39
Completions 29.1 36.9 31.4 34.4 36.1 34 35 39
Total                
Starts 164.3 173.2 181.1 190.8 189.8 193 198 207
Completions 139.6 166.3 165.2 187.8 188.9 190 195 203

Source: MHCLG, Experian. 2018 is an estimate as Q4 private housing data for Scotland not yet available

The value of public housing output was expected to remain flat in 2019 at £6.1bn, then edging up by 3% in 2020 and 10% in 2021.

Growth forecasts for private housing output were unchanged, Experian said, by 2% this year after 2018’s 5.3% hike, with increases of 3% in 2020 and 5% in 2021.

In the absence of a recession and with housebuilders under pressure to provide more homes “the direction is almost inevitably upwards”, it added.

Tony Williams, Building Value analyst and a member of the main forecasting committee for Experian’s construction data, said: “Given the ‘B’ word, Brexit, and other background noise these numbers are alright to be getting on with.

“And if you are in housing or infrastructure then they significantly better than that.”

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