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Affordable housing starts value expected to increase by a fifth this year
The value of affordable housing starts this year is expected to be up on 2020 by a fifth, according to a construction industry analyst.
As part of its 2021-2023 forecast, Glenigan predicted that increased investment from housing associations and more available government funding will together drive affordable housebuilding growth.
The value of affordable housing project starts fell 3% in 2020 amid the coronavirus pandemic, having climbed 17% in 2019.
After a surge in 2021, Glenigan expects to see an 8% rise in 2022, with project values stabilising in 2023.
Overall construction activity in the UK has rallied since the initial COVID-19 crisis and is expected to return to pre-pandemic levels by 2022, with starts anticipated to be 3% higher than in 2019, Glenigan said.
The value of project starts climbed 20% in the three months to May 2021 and was 70% higher than during the first national lockdown a year earlier.
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But the analysts warned that construction recovery will be stronger in some regions and sectors than others over the next two years, reflecting post-pandemic shifts in the UK’s economic and social landscape.
Student accommodation, where construction work fell sharply in 2019 and 2020, is predicted to continue to struggle with the ongoing impacts of Brexit and the global health crisis due to its reliance on tenants coming from overseas.
Despite some increase, the value of student accommodation starts is forecast to remain 12% below their 2018 peak by 2023.
Allan Wilen, economic director at Glenigan, said: “There are definitely reasons to be cheerful and the forecast provides a good indication that the construction industry is returning to pre-COVID levels of activity.
“However, the sector faces a number of challenges ahead. Particularly, the current shortage of construction materials highlights the potential impact of supply-side constraints on the pace of the recovery over the next two years.
“House builders and developers will need to be agile in a post-COVID landscape, evolving with emerging opportunities, for example, the new regulatory framework and requirements of the Fire Safety Bill.
“They will also need to mitigate a number of external risks, reinforce supply chains, as well as adapting to digital transformation. Indicators suggest we’re now entering a disruptive era in construction but equally an exciting one.”
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