There are clear signs that there’s a strong future ahead for everyone with an interest in the industry.
Despite the optimism, some concerns still remain. Regular repair and maintenance work hasn’t been growing as well so most of the positive forecasts relate to house building and infrastructure developments.
The building of new properties has been a particular issue for the whole of the UK, not just the construction industry. There is a huge housing shortage at the very time the population of the UK is increasing.
Britain is actually caught in the worst housing crisis of recent times.
Demand is outstripping supply, particularly in London, but this issue also presents an opportunity in itself.
The government is doing its best to help. They want to see 200,000 new homes to be built on brownfield land by 2020 and, more specifically, 50,000 new homes spread across 20 new housing zones across London.
They’ve set aside an initial £5 million fund to help local authorities create the first 100 sites with promises that this fund could grow to as much as £500 million.
The government is also addressing the issue of bureaucracy, which is the other big obstacle to sustained property development. They will put a lot of pressure on local councils to speed up the administration process and simplify policy issues to prioritise the building of property on this derelict land.
The growth of the construction industry must not be held back by the red tape that usually accompanies and goes hand-in-hand with planning permission and other rules and regulations.
Work on housing is said to account for an estimated 37% of the UK’s total construction output from now until 2018. If this is accurate then this growth will likely mean 182,000 new construction jobs.
The increase in the number of skilled construction workers of all levels will be needed, especially with the challenging targets that the government has set for the construction industry to hit by 2025.
There must be a 33% reduction in the initial cost of construction and the whole-life cost of built assets. There needs to be a 50% reduction in the time taken from inception to completion for new and refurbished assets. There also must be a 50% reduction in the trade gap between total exports and total imports for construction products and materials.
And as an added bonus, the still, relatively new, Help to Buy scheme (with required deposits being as low as 5%) is helping more people to afford to buy these new properties, which is ultimately the whole point.
Construction Industry Forecast
We expect to see the construction industry as a whole will still feel flat over the next couple of years, but that insolvency numbers will level off.
It’s going to take time for bank finance to filter back into construction in any meaningful way, although there are alternative finance options available.
If you own a business within the construction sector feel free to get in contact for advice on any aspect of protecting and restructuring your business.