COVID-19 Impact Sees 23% New Homes Decline Despite Q4 Bounce Back

THE PANDEMIC caused the number of new homes registered to be built to fall by 23% in 2020, according to new figures released today by NHBC.

However, productivity moved close to pre-pandemic levels in the final quarter of the year with new home registrations down just 2% on the same period in 2019. NHBC registered a total of 123,151 new homes in 2020, compared to 160,319 in 2019.

The largest falls were seen in the second quarter of 2020 as the initial lockdown halted work on site. Housebuilding activity rebounded quickly as sites reopened in the summer with a total of 39,749 new homes being registered in the final quarter, 34% up on the third quarter.

New Homes Decline Despite Q4 Bounce Back

Steve Wood, NHBC CEO

NHBC Chief Executive, Steve Wood, said: “Against the backdrop of the Covid-19 pandemic, the new build housing market has held up very well, with housebuilders showing resilience and adaptability throughout 2020.

“Last Spring saw a sharp shock to the housing market and it is heartening that by the close of 2020, productivity levels had moved very close to those seen in late 2019.

“Confidence in the housing market, particularly for newly-built homes, remains strong with many larger housebuilders forward sold into the summer despite the continued impact of the pandemic and prevailing economic uncertainties.”

“We expect increased volumes in 2022 and by 2023 new home registrations to be at least at 2019 levels and hopefully above that.”

Third Less Carbon Emissions 

Following publication of the Government’s response to the Future Homes Standard consultation in the second week of January, all new homes will be expected to produce 31% lower carbon emissions from this year. These homes are also expected to be zero carbon ready by 2025, producing 75-80% lower carbon emissions compared to current levels.

Steve Wood said, “The 31% change for 2021 is a big stretch. House builders themselves are focused on that and know the Standard has to be implemented, not least because they know their customers are demanding that. Energy efficiency is something home buyers are becoming increasingly aware of.”

Regional Home Registrations

The numbers of new home registrations fell in every UK region in 2020, with the South East of England (-28 %), Scotland (-28%) and Northern Ireland (-38%) seeing the most significant falls, whilst London was down 21%.

The data indicates that cities saw greater falls in new home registrations than the regions with, for example, Manchester dropping 42% in 2020 versus 2019, compared with just 27% in the whole of the North West. London and Glasgow were the only major cities to buck this trend.

New home registrations in the private sector fell by 26% to 81,067. Affordable and build to rent sector saw a more limited fall of 16% to 42,084, compared to the previous year. This reflects the continued long-term attractiveness of UK housing as an asset class for inward investment.

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