Social housing construction continues to defy downturn
Work on social housing construction is set to rise from 2019-2020, according to Glenigan’s construction market analysis
Increased support for shared ownership developments that were announced in the last Budget is expected to provide a stimulus to social housing construction. While projects disrupted by the 2017 Grenfell tragedy are also expected to begin moving onto site.
In the three months to July 2019, the underlying value of social housing construction projects starting on site surged 40% according to Glenigan’s analysis.
Glenigan’s economics director Allan Wilén, commented: “A brighter outlook for project starts is forecast for 2019.”
After an 11% fall in the underlying value of social housing starts in 2018, a rise of 2% is expected this year according to Glenigan’s construction market research. A further rise of 3% is anticipated in 2020.
Registered social landlords (RSL) are gearing up for a rise in starts with a swathe of projects out to tender according to Glenigan’s data. These range from a £22m proposal for more than 200 homes in Plymouth by Clarion to a £7m scheme in north London for 32 flats by Christian Action Housing Association.
Glenigan’s data suggests that much of this workload may come from schemes already with planning permission.
Wilén commented: “Progress of planned developments has been disrupted over the last two years as housing associations have reviewed the implications of the Grenfell fire for refurbishment and new build schemes.
“This is evident in an 11% decline in the value of apartment projects that secured planning approval during 2018. In contrast, the value of housing projects increased 5%.
“Overall, the value of detailed planning approvals for affordable housing projects stabilised last year. This is expected to support a modest improvement in affordable housing project starts during 2019 as projects reviewed in the wake of the Grenfell tragedy start on site.”
With a strong pipeline of approvals in place and RSLs planning to build more homes, opportunities are expected to emerge in the social housing construction sector over the next couple of years.