Recent data analysis by APRAO using statistics from the Office for National Statistics has shown a significant decrease in the number of homes constructed in the UK last year, marking the first annual decline since the onset of the pandemic.
End to Steady Growth in Home Construction
APRAO’s analysis revealed that 189,260 permanent dwellings were completed in 2023, a figure slightly higher than the 20-year annual average of 188,290. Despite this, the total represents an 11.8% decrease from the previous year, halting a two-year trend of growth in housing delivery. This downturn is only the second time since 2016 that the number of new-builds has fallen year on year, with the first being the onset of the pandemic in 2020.
Regional Variations in Housing Delivery
The decrease in housing construction has been felt unevenly across the UK. Wales and Northern Ireland experienced the most significant drops, with reductions of 22.3% and 21.3% respectively, pushing their annual outputs below the 20-year average. England and Scotland also saw declines in new home completions by 11.1% and 11.4% respectively, although their numbers still surpassed the two-decade average.
Challenges and Outlook for the Housing Market
Daniel Norman, CEO of APRAO, commented on the findings, highlighting the broader economic challenges impacting the sector: “There’s no doubt that higher interest rates, untamable inflation and a cooling housing market have had a notable impact on the delivery of new homes across the UK market.”
He further elaborated on the future outlook, stating, “While this decline has been more pronounced across some parts of the UK compared to others, new home delivery is down across the board and this really highlights just how difficult the landscape has been, not just for homebuyers, but for the nation’s housebuilders.”
Norman also provided projections for the coming year, suggesting a continued challenging environment: “The expectation is that while 2024 is set to be a more stable year, market conditions are predicted to remain subdued until interest rates do start to reduce. With this yet to happen, the likelihood is that we will see another year of muted housing delivery.”
This analysis from APRAO serves as a stark reminder of the fluctuating dynamics within the UK housing market, influenced heavily by economic factors that continue to challenge both builders and landlords alike.
