The first official data on net additions shows the extent of the hit to the housebuilding sector during 2020. Although, as Advantage wrote at the time, many construction sites remained operational during lockdown, helping to bolster the UK economy, the latest figures show how far housebuilding levels fell during this period.
Data published on 25th November by the Department for Levelling Up Housing and Communities showed that there were 216,490 net additional dwellings created in the 2020/21 year – a period which covered the first initial Covid lockdown in spring 2020 – a drop of more than 26,000 on the 2019/20 numbers.
As Housing Today noted, this represents a fall of 11% from last year’s high of 242,700, and is the lowest number reported since the 189,650 recorded in 2015/16.
While significant, the drop was far less severe than feared
However, they added that while significant, the drop is well below the impact initially feared when the pandemic shut all housebuilding sites for two to three months in 2020, at which point the Construction Products Association predicted completions would fall by more than 40% in 2020.
The latest figures, which the government has said are the most reliable measure of housing supply in England, show that 194,060 (90%) of the net additional dwellings were new build homes.
The remainder of the new homes were delivered through change of use. Meanwhile, 5,760 homes were demolished.
The impact on the sector was not as dramatic as the global financial crisis
The fall in supply of new homes in the wake of the COVID-19 pandemic is currently not as dramatic as the fall in supply following the 2007-08 financial crisis.
Net additional homes fell by 18% between 2007-08 and 2008-09 and continued to fall until hitting an all-time low in 2012-13. The latest figures mark the first time housing supply has not increased since that date.
As Advantage wrote earlier in November, the government is seeking to tackle the shortage of homes available to buy, which has been exasperated by 2020’s fall in housebuilding figures, and says that loan funding of at least £624m will be made available to house builders to deliver up to 116,000 new homes.
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