What’s Driving Growth in the UK Housebuilding Market?
The UK housebuilding market is currently witnessing a significant surge. This growth is not just reshaping the physical landscapes of towns and cities but also having far-reaching implications for the economy and society at large. But what’s driving the growth in the UK housebuilding market?
A multitude of factors are contributing to this accelerated pace of development and construction across the nation. From government policies to economic indicators, from societal shifts to technological advancements, the dynamics of the housebuilding market are influenced by a diverse range of elements.
In this article, we will delve deeper into these driving forces, offering a comprehensive understanding of the current state of the market. Whether you’re an industry insider, a prospective homeowner, or just someone interested in the housing market, this exploration promises to provide valuable insights into what’s fuelling the UK housebuilding market’s expansion.
What’s the Current Situation?
Housebuilding in England saw a remarkable jump in the second quarter of 2023 as developers accelerated projects to sidestep stricter energy performance regulations. This trend indicates the adaptability of critical players in the market, demonstrating their ability to respond swiftly to changing circumstances.
A Response to Rises in Price
Over the past 15 years, house prices in the UK have soared by 44% nationally and by a staggering 74% in London. This long-term trend was punctuated by a surprising rise in April 2023, following seven consecutive months of falls. However, despite this surprise increase, the overall rate of house price growth has shown signs of slowing, with some sources reporting the fastest annual pace of fall since 20116.
These high prices have likely been a motivating factor for new houses to be built. Multiple significant reviews of the British housing market have concluded that high prices are directly a result of inadequate supply, leading to increased interest from housebuilding organisations.
The Role of Government Legislation
Recent changes in government legislation go some way to explaining why the UK housebuilding market is increasing. The Levelling-up and Regeneration Act 2023, for instance, introduced sweeping reforms in planning, environmental protection, local democracy, and regeneration. These changes were designed to facilitate development and construction, thereby boosting the housing market.
National Planning Policy Framework
One of the critical amendments under this Act was the revision of the National Planning Policy Framework. This revision aimed to streamline the planning process, making it easier for developers to navigate the system and initiate new projects. The revised framework also set out the government’s planning policies for England, providing clear guidelines on how these policies are expected to be applied.
Town and Country Planning Amendments
In addition, the Town and Country Planning 2015 was also amended. The amendment expanded the granting of planning permissions, encouraging further development. This legislative change has been a significant factor in stimulating growth in the housebuilding market by reducing bureaucratic hurdles and accelerating the planning process.
What Else is Influencing the Market?
While government legislation has played a significant role in stimulating growth in the UK housebuilding market, it’s not the only factor. Economic trends, technological advancements, and demographic changes are also contributing to the current surge.
Economic Trends
The economic environment significantly impacts the housing market. For instance, historically, low interest rates have made mortgages more affordable, fuelling demand for new homes. Additionally, increased business investment can also stimulate the housing market by creating job opportunities, fostering economic growth, and boosting consumer confidence.
Technological Advancements
Technology is reshaping numerous industries and is a prime contributor to why the UK housebuilding market is growing fast. From offsite construction methods to digital platforms for property marketing, technology is enabling faster, more efficient building processes and enhancing the way properties are marketed and sold.
Innovations like Virtual Reality (VR) and Augmented Reality (AR) are also transforming the home buying experience, making it possible for potential buyers to tour properties remotely.
Automation also forms a crucial aspect of this shift. From increasing efficiency, reducing costs and improving safety and eco-friendly practices, the ways in which automation is reshaping the construction industry are numerous.
Demographic Changes:
Demographic shifts, such as the ageing population and changing household compositions, are influencing housing demand. The rise in single-person households and smaller family units has increased the demand for smaller, more affordable homes. Conversely, the ageing population has led to a growing need for accessible and adaptable housing.
Moreover, societal shifts towards working from home have caused a surge in demand for homes with additional space for offices. This trend has further spurred growth in the housebuilding market as developers adapt their designs to meet these evolving needs.
Want to Make the Most of the Growth in Housebuilding?
At ITS, we’re closely involved with the UK housebuilding market, offering top-tier services to candidates and clients alike. With professionalism, diversity and inclusion as cornerstones of our ethos, we’re passionate about helping the industry grow in a sustainable and holistic way.
So, if you’re looking to explore the opportunities offered by the recent growth in the UK housing market, reach out to us today. We can provide information on our services, specialisms and more.
