Disconnect between supply and demand is nothing new for the housing sector
Search Acumen comments on ONS construction figures for August, which show a disconnect between supply and demand is nothing new for the housing sector.
- Monthly construction output fell 0.2% in volume terms in August 2021 with the level of output now 1.5% below its pre-coronavirus pandemic (February 2020) level.
- Public sector construction output for new housing remains 28.6% down on February 2020 while private housebuilding is down 3.8%.
Andy Sommerville, Director at Search Acumen, comments:
“The pain of supply issues across large swathes of the UK economy is nothing new to the housing market, where demand and supply have been disconnected for almost as long as memory serves. This latest dataset reflects continuing stresses and strains caused by additional supply chain issues in the construction industry. Strong levels of buyer demand continue to outstrip the sector’s capacity to keep up with building homes at a pace that can resolve the affordability crisis. Private housebuilding remains nearly 4% down on pre-pandemic levels while public housebuilding has fallen almost 30%.
“We’re seeing the emerging realities of Brexit combined with the lingering impacts of the pandemic at play. The shortage of raw materials and labour have derailed the daily lives of thousands of Brits, and threaten to put additional barriers in the way of homeownership ambitions as construction output dips and builders struggle to continue operations.
“Housebuilders and homebuyers alike will be looking to government for more than just a rebrand of the Ministry for Housing, Communities and Local Government to address the issues of levelling up the property market. While planning reforms are being taken back to the drawing board, expectations will focus on the Budget in a fortnight’s time, but the strain on public finances may rule out the kind of show-stopping housing announcements that have landed in previous years.”
Kindly shared by Search Acumen