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Residential

UK Construction Intelligence Report

Overview

Residential sector growth - 2020

Following the Conservative landslide victory in the general election it’s a good time to reflect on what all the main parties stated during their election campaigns and its pleasing to see whilst each had their own unique points of view for the residential sector there was much cross party alignment on the core matters of increasing the UK’s housing supply (starts and completions) and the drive to be a cleaner and more responsible sector with commitment to achieve net zero carbon emissions for new homes.

To achieve the circa 300,000 homes per annum target which is often publicised the sector will take a real step change and engagement from all public and private stakeholders. The Government has promised the national housing associations/ regional providers in England access to £3bn of borrowing - The Affordable Homes Guarantee Scheme in order to deliver 30,000 new affordable homes. The Conservative manifesto recognised the affordability challenges for first time buyers and through the First Home Scheme will be offering greater than 30% discounts supported by public sector contributions. Only time will tell if these positive sound bites can really be achieved, but at least the public and the opposition to the Government have clear and tangible deliverables to hold the Government to account.

Trade

Output across the Construction industry was reported by Barbour ABI as being down by 2.8% on an annual comparison like for like Nov19 vs Nov18.

Specifically, to Residential Housing both the Public and Private Sector Housing showed a small annual decrease of 1.2% lower than the previous year quarter ending Nov18.

Of the Top 10 biggest projects by value (£) 40% of these were recorded in the Residential Sector for the month of Nov 19 with a very positive market share of 38.1% of all Projects awarded being in Residential, up just over 10% from Oct 19.

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Project showcase

Faithful+Gould Property Clients

Brent Cross masterplan

We focus on a development by one of our key Faithful+Gould Property Clients. Our working relationship with Argent Related spans a number of years and covers the delivery of both Commercial office and Residential assets in the Midlands and London.

In 2016, Argent Related formed a joint venture with Barnet Council to design and develop a 180-acre mixed-use neighbourhood at Brent Cross South. The new neighbourhood will provide 6,700 new homes, workspace for over 25,000 people and pedestrian-friendly streets with local shops and restaurants. The development will be a model for how London should grow as its population increases and new homes and workspaces are required.

The project, which already has outline planning consent, is at the heart of the wider Brent Cross regeneration initiative, a £4.5 billion investment that also includes the ambitious expansion of Brent Cross Shopping Centre and the development of a new Thameslink station, Brent Cross West. Together, these three coordinated initiatives provide an unparalleled opportunity – 15 million sq. ft of development over 370 acres, serviced by exceptional transport links into and out of central London.

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The Brent Cross masterplan will deliver:

  • 6,700 new homes with a mix of sale, rental and affordable homes
  • 3+ million square feet of new office space providing over 25,000 jobs
  • A new high street, with local shops and restaurants
  • Improved transport connections, with the new Brent Cross West Thameslink station serving the area
  • Better walking and cycle routes
  • New bridges over the North Circular Road, Midland Main Line and Hendon Way
  • New squares and parks with inspiring places for children to play
  • New and improved community facilities.

For more information on this scheme follow the link https://brentcrosssouth.co.uk/

What lies ahead - 2020

2020 sees us move into a year of Conservative leadership with a large majority government. In the February cabinet reshuffle the Secretary of State for Housing, Communities and Local Government saw Robert Jenrick retaining the cabinet role, however Esther McVey has been replaced as the Minister of State for Housing by Christopher Pincher, the 10th Housing Minister in the last 10 years.

Contrary to the Sector forecasts of Experian and Barbour ABI, which indicate a slowing of growth not picking up until 2021/22 Faithful+Gould is preparing for another strong year within the residential sector.

We take this opportunity to set out our predictions for the residential sector and during the year we will see what’s happening and reflect upon the market, government and other sector news to either support and confirm or dispel our forecasts;

Predictions

We Take this opportunity to reflect on our predictions for the year:

Build to Rent starts beginning to accelerate in our regional cities and towns. The BTR model is now widely accepted in our leading regional Cities (Manchester, Birmingham, Bristol etc.) so we forecast the trend continues with a focus to drive starts in UK’s smaller cities and towns. Details of the growth and benefits of the BTR sub-sector is discussed here Faithful+Gould Build to Rent Gathers Pace

Building on our involvement of delivering Co-Living Developments in Manchester we expect to see Co-Living starts in many of our leading regional Cities. Watch out for guidance and / or potential planning policy change to meet this new experience.

With support from Homes England and Central Government the offsite community of manufacturers will deliver in excess of 20,000 new starts (circa 8-10% market share);

Government and public appetite to have net zero carbon homes will drive significant steps in design and technology as we start the 10 year count down to 2030 with the introduction of the first phase of the Future Homes Standard in October 2020.