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Growth In The UK House Building Market - What Is Driving It?

27th March 2024


The housing construction sector in the UK is experiencing a robust growth phase, this upswing is not only transforming the visual aspects of urban and rural areas but also having an impact on both the economy and broader society. But what are the catalysts behind the expansion of the UK’s housebuilding sector?

There are numerous factors that are propelling this development and construction activity throughout the country. From official policies to economic signals, and from changes in societal norms to advancements in technology.

So what is the present landscape? The second half of 2023 witnessed a notable surge in housebuilding efforts in England, as developers ramped up projects to get ahead of more stringent energy efficiency standards. This reflects the market's agility, showcasing the capacity of its key participants to adapt promptly to evolving regulations.

Reacting to price increases. The past decade and a half have seen UK house prices climb by 44% nationwide, with an even more pronounced 74% increase in London. This upward trend experienced a surprising uptick in April 2023 after seven months of decline. Despite this, the overall trajectory of house price growth appears to be moderating, with certain reports indicating the quickest yearly decrease since 20116.

This surge in prices has undoubtedly been a driving force behind the construction of new housing. Extensive analyses of the UK housing market have deduced that the high prices result mainly from a lack of supply, thus sparking interest among housebuilding firms.

The impact of government policy. The recent uplift in the UK housebuilding market can partially be attributed to legislative changes. For instance, the Levelling-up and Regeneration Act 2023 brought about comprehensive reforms in planning, environmental safeguarding, local governance, and urban renewal, aimed at stimulating development and, consequently, the housing market.

Revisions to the National Planning Policy Framework. A key update within this Act involved the overhaul of the National Planning Policy Framework, aimed at simplifying the planning process. This modification facilitates easier navigation for developers when starting new projects and outlines the government’s planning policies for England, clarifying how these policies should be implemented.

Modifications to Town and Country Planning. Furthermore, the Town and Country Planning 2015 saw amendments aimed at broadening planning permissions, thereby encouraging more development. This legislative adjustment has significantly contributed to the housebuilding market’s growth by diminishing regulatory obstacles and expediting the planning stages.

Technological progress. The housebuilding market is swiftly evolving thanks to technological innovation. From construction methods offsite to digital platforms for real estate marketing, technology is making building processes quicker and more efficient while improving how properties are marketed and sold.

Moreover, automation is playing a key role in this transformation, improving efficiency, reducing costs, and promoting safer, more sustainable construction practices.

Demographic trends. Demographic changes are also influencing housing demand. The increase in single-person households and the shift towards smaller family configurations are heightening the need for smaller, more affordable homes. At the same time, an ageing population is driving demand for homes that are accessible and modifiable.

Additionally, the trend towards remote work has spiked the demand for homes with office spaces, pushing developers to adapt their designs to accommodate these new preferences.

We have a desk dedicated to supporting the UK Housing sector with thousands of skilled construction staff nationwide who are available for immediate support if you require on upcoming projects. Get in touch today to speak to one of our experienced consultants about how we can help you - 0115 900 3171

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