Housebuilding Market Report - UK

Housebuilding Market Report - UK 2018-2022 Published: 04/07/2018 / Number of Pages: 79 / Price: 845.00 Introduction and Overview There are several key additions in the 13th edition of the housebuilding market report, including a review of residential & change of use conversions; an analysis of construction methods - masonry, timber frame steel/concrete mainframe and offsite; contractor reviews by region and a review of housing associations that build homes. Key issues analysed in the report: UK Housebuilding market size - contractors output, newbuild completions and conversions 2016/17, estimates for 2017/18. Forecasts for annual housebuilding completions and contractors output to 2021/22. Review of construction methods - including potential for offsite housing. A review of housing developers - overall market performance, company profiles, annual completions by tenure. Areas of particular interest: Review of the impact of Help to Buy on the housebuilding market, which has been credited with a recent increase in completions and is now extended to 2021. Review of the progress of the Affordable Housing programme to deliver low-cost homes. Analysis of the use of Build-to-Rent to meet the housing shortage. Review of the residential/ change-of use conversions sector and the impact of permitted rights to meet new homes targets. Assessment of housebuilding methods and the potential for offsite construction to meet demand for homes. New entrants into offsite housing sector. Analysis of top 60+ housing developers including housing associations: 2017 turnovers, completions by tenure, average sales prices, regions served. Expansion of housebuilding operations and increase in capacity among housing associations and diversification into open market sale and rented homes.

Some of the companies included: Abbey Homes, Avant Homes, Barratt Developments, Bellway Homes, Berkeley Homes, Bloor Homes, Bovis Group, Cala, Countryside Prop's, Crest Nicholson, Fairview New Homes, Galliard Group, Gleeson Homes, Harron Homes, Hill Holdings, Jones Homes, Keepmoat Homes, Kier Living, Linden Homes, Lovell Partnerships, McCarthy & Stone, Miller Homes, Morris Homes, Persimmon Group, Redrow Homes, Springfield Properties, Strata Homes, Stewart Milne, St Modwen Homes, Story Homes, Taylor Wimpey, Telford Homes, Wates Residential, Westleigh Part'ships, Weston Homes, Willmott Dixon and more. HOUSING CONSTRUCTION OVERVIEW Housebuilding completions & conversions and contractors output 2011/12 to 2017/18. Key market drivers and forecasts to 2021/22. Conversions 2011/12 to 2017/18 and forecasts to 2021/22. Key market drivers and mix by type of conversions. Market influences: macro-economic factors; housing policy and incentives e.g. Help to Buy and Affordable Housing programmes; new housing price trends; growth in Build To Rent; planning issues & land availability; skills shortages. MARKET MIX BY TENURE Market mix by tenure; private sale; housing associations - affordable rent, local authorities-social rent, Build to Rent, selfbuild. Private sector housebuilding contractors output 2011-2017. Review of Help to Buy 2013-2017; comparison of completions and contractors output by region 2015 & 2017; review of Build to Rent sector including market size estimates 2013-2017 by volume & by value with forecasts to 2022; self-build market review 2011-2017. Public sector housebuilding - contractors output & completions 2011-2017; comparison of contractors output by region. Affordable Housing review -completions 2012/13 to 2016/17; key drivers; mix of completions by market segmentation e.g. affordable rent, social rent, shared ownership. NEW HOUSING BY TYPE AND SIZE Overview of completions by type of housing 2017 i.e. detached, flats, terraced etc. England completions by bedroom numbers for total housing, all private housing and all social housing 2011/12-2016/17 and underlying market factors. England completions by bedroom numbers for total flats, all private flats and all social housing flats 2011/12-2016/17 and underlying market factors. Overview of housing construction methods - mix by method e.g. masonry, offsite etc. Reviews of masonry construction, timber frame, other offsite methods - market mix. HOUSING DEVELOPERS REVIEW Overview of housing developers/builders industry - shares by types of developer e.g. larger private housebuilders, SME housebuilders, housing associations and self-builders. Review of 36 largest housing developers (500+ completions a year) - number of completions (private & affordable) and average sales prices; 2016 & 2017. Review of SME housing developers (<500 completions a year) by region.

Review of 30 largest housing associations building homes - number of completions (affordable, open market sale and social rent) 2016 & 2017. Offsite housing systems manufacturers reviews. Report Summary The housebuilding market has performed well in recent years with 2016/17 representing a fourth successive year of growth following the start of the recovery in the housebuilding sector after the last recession. This growth has largely been driven by increasing activity levels in the private housing sector, underpinned by a combination of low interest rates, competitive mortgage deals and especially the Help to Buy equity loan scheme. Average selling prices have also been increasing year on year over the same period, contributing towards strong growth in total contractors output, which nearly doubled between 2011/12 and 2017/18. The key reason for this strong growth has been a marked shift away from 1-3 bedroom flats towards higher value 4+ bedroom detached and semi-detached homes, particularly across London, the South East and East of England. However, most other regions of the UK have also been affected by price increases, albeit to a lesser degree. While interest rates remain on the lower side, mortgage deals are likely to remain competitive although interest rate rises could easily reverse growth in the market. Affordability will therefore continue to be a key factor in sustaining demand, with the extension of Help to Buy equity loans in England through to 2021 expected to underpin demand for private sector new housing. Partly due to high housing prices, the other notable trend has been a change in the mix in tenure, with a fall in home ownership and an increase in private rental and a decline in social rent, to be replaced by a rise in the levels of affordable rent. This decline in social rent has been brought about by government cuts to social housing providers capital budgets. This in turn has compelled the latter to shift their sources of funding towards affordable rent and open market sales, which in turn contributes towards funding new developments. List of Contents Contents Listing 1. INTRODUCTION 8 1.1 INTRODUCTION 8 1.2 SOURCES OF INFORMATION 8 2. SUMMARY 10 2.1 MARKET SIZE AND TRENDS 10 2.2 MARKET PROSPECTS 11 3. ECONOMIC ENVIRONMENT 13 3.1 GDP 13 3.2 INFLATION & INTEREST RATES 14 3.3 UNEMPLOYMENT 15

3.4 HOUSEHOLD CONSUMPTION 16 3.5 HOUSING & CONSTRUCTION 16 3.6 STERLING 17 3.7 POPULATION PROFILE 18 3.8 CONCLUSIONS 18 4. HOUSING CONSTRUCTION MARKET OVERVIEW 19 4.1 DEFINITION 19 4.2 OVERVIEW OF MARKET SIZE AND TRENDS 19 4.2.1 Newbuild 20 4.2.2 Conversions and Permitted Rights 22 4.3 MARKET INFLUENCES 24 4.3.1 Economic, Social and Demographic Factors 24 4.3.2 Government policy 24 4.3.3 Increase in Average New House Prices 27 4.3.4 Growth in The Private Rental Sector / Build to Rent 28 4.3.5 Planning Issues and Land Availability 30 4.3.6 Shortages in Traditional Construction Skills 30 5. MARKET MIX BY TENURE 32 5.1 DEFINITION 32 5.2 PRIVATE SECTOR 33 5.2.1 Output and Completions 33 5.2.2 Help To Buy 33 5.2.3 Completions by Region 34 5.2.4 Build to Rent 36 5.2.5 Self Build 38 5.3 PUBLIC SECTOR 39

5.4 AFFORDABLE HOUSING 40 6. MIX OF NEW HOUSING BY TYPE AND SIZE 43 6.1 BY TYPES OF DWELLING 43 6.1.1 Overview 43 6.1.2 Private Sector 46 6.1.3 Public Sector Housing 48 6.2 HOUSEBUILDING METHODS 50 6.2.1 Overview 50 6.2.2 Masonry 51 6.2.3 Steel or Concrete Mainframe 52 6.2.4 Offsite Construction 52 7. HOUSING DEVELOPERS 55 7.1 DEFINITIONS AND MARKET STRUCTURE 55 7.2 LARGE PRIVATE HOUSING DEVELOPERS (1,000 HOMES PLUS) 56 7.3 MEDIUM SIZE HOUSEBUILDERS - 100 TO 500 HOMES 71 7.3.1 London and Southern Counties 71 7.3.2 Northern Regions - North West & North Wales, North Midlands, Yorkshire, North East 72 7.3.3 Scotland 73 7.3.4 Midlands and East of England 74 7.3.5 South West, South Wales 75 7.4 HOUSING ASSOCIATIONS 76 7.5 OFFSITE HOUSING SYSTEMS MANUFACTURERS 78 Tables & Charts TABLE 1: UK HOUSING CONSTRUCTION MARKET BY CONTRACTORS OUTPUT ( BN) AND VOLUMES (NEWBUILD COMPLETIONS & CONVERSIONS - '000S) 2011/12 TO 2021/22 10 TABLE 2: GDP DATA - 2015-2018 - KEY CONSTITUENT ELEMENTS 13

CHART 3: INTEREST RATES AND INFLATION (CPI) FROM 2000-2022 15 CHART 4: PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2022 16 TABLE 5: EXCHANGE RATE FLUCTUATIONS 2014-2020 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 17 CHART 6: UK HOUSING CONSTRUCTION MARKET BY CONTRACTORS OUTPUT ( BN) AND VOLUMES (NEWBUILD COMPLETIONS & CONVERSIONS - '000S) 2011/12-2016/217 AND FORECASTS TO 2021/22 20 CHART 7: UK HOUSING NEWBUILD LEGAL COMPLETIONS 2011/12-2016/17 AND FORECASTS TO 2021/22 21 CHART 8: ENGLAND & SCOTLAND - NUMBER OF HOUSING CONVERSIONS 2011/12-2016/17 AND FORECASTS TO 2021/22 22 CHART 9: TOTAL NUMBER OF CONVERSIONS IN ENGLAND (42,780) BY TYPE OF DEVELOPMENT 2016/17 23 TABLE 10: HOUSEHOLD SIZE ESTIMATES ENGLAND 2014-2039 ('000S) 24 TABLE 11: AFFORDABILITY FACTORS UK - AVERAGE DWELLING PRICE AND EARNINGS RATIO: 2011-2017 YEAR TO SEPTEMBER 26 CHART 12: NEWBUILD AVERAGE PRICE TRENDS BY REGION MARCH 2015 -MARCH 2018 28 CHART 13: GROWTH OF THE PRS SECTOR 2017-18 TO 2029-30 (MILLION DWELLINGS) 29 CHART 14: UK NEWBUILD COMPLETIONS BY TENURE 2016/2017 32 CHART 15: UK PRIVATE SECTOR HOUSING CONSTRUCTION OUTPUT BY NUMBER OF COMPLETIONS AND CONTRACTORS OUTPUT ( BN) 33 CHART 16: HELP TO BUY LEGAL COMPLETIONS IN ENGLAND 2013-2017 34 CHART 17: PRIVATE HOUSEBUILDING COMPLETIONS- BY REGIONS BY NUMBER 2015 & 2017 35 CHART 18: PRIVATE HOUSEBUILDING COMPLETIONS- BY REGION BY VALUE M (CONTRACTORS OUTPUT) 2015 & 2017 35 CHART 19: BUILD TO RENT MARKET BY CONTRACTORS OUTPUT ( BN AT CURRENT PRICES) AND NUMBER OF DWELLINGS 2013-2017 AND FORECASTS TO 2022 36 CHART 20: BTR DEVELOPMENTS % SHARE OF NEW HOUSING OUTPUT BY NUMBER OF DWELLINGS. 37 CHART 21: UK SELF-BUILD MARKET - COMPLETIONS BY VOLUME (NO. DWELLINGS) 2011-2017 38 CHART 22: UK PUBLIC SECTOR HOUSING CONSTRUCTION OUTPUT BY NUMBER OF COMPLETIONS AND CONTRACTORS OUTPUT 2011-2017 ( M) 39 CHART 23: PUBLIC HOUSEBUILDING COMPLETIONS- BY REGIONS BY VALUE ( MILLION CONTRACTORS OUTPUT) 2015 & 2017 40

CHART 24: ENGLAND AFFORDABLE HOUSING OUTPUT BY NUMBER OF NEWBUILD COMPLETIONS 2012/13-2016/17 41 CHART 25: AFFORDABLE HOUSING COMPLETIONS IN ENGLAND BY SECTOR 2012/13-2016/17 42 CHART 26: UK ALL NEW HOUSING COMPLETIONS - MIX BY TYPE 2016/17 43 CHART 27: ENGLAND TOTAL HOUSING COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 44 CHART 28: ENGLAND TOTAL HOUSE COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 45 CHART 29: UK ENGLAND TOTAL FLATS COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 45 CHART 30: ENGLAND FLATS CONSTRUCTION VS FLATS CONVERSIONS 2011/12 TO 2016/17 46 CHART 31: ENGLAND PRIVATE SECTOR HOUSES - TOTAL NUMBER OF COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 47 CHART 32: UK ENGLAND PRIVATE SECTOR FLATS - TOTAL NUMBER OF COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 48 CHART 33: UK ENGLAND PUBLIC SECTOR HOUSES - TOTAL NUMBER OF COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 49 CHART 34: UK ENGLAND PUBLIC SECTOR FLATS - TOTAL NUMBER OF COMPLETIONS BY DWELLING SIZES (NUMBERS OF BEDROOMS) 50 CHART 35: UK MAIN LOADBEARING STRUCTURAL METHODS OF BUILDING HOUSING BY NUMBER OF COMPLETIONS 2016/17 50 CHART 36: UK CONCRETE BLOCK PRODUCTION, DELIVERIES/SALES & STOCKS (MILLION M2) 2011 TO Q1-3 2017 51 CHART 37: UK MARKET FOR FACING BRICKS BY MAIN END USE SECTOR % BY AREA INSTALLED 2017 52 CHART 38: UK TIMBER FRAME HOUSEBUILDING COMPLETIONS BY NUMBER OF DWELLINGS ('000) 2011-2017 53 CHART 39: UK TIMBER FRAME HOUSING ESTIMATED COMPLETIONS BY SECTOR (SOCIAL, PRIVATE, SELF-BUILD) % BY VOLUME 2017 53 CHART 40: NEWBUILD HOUSING COMPLETIONS - DEVELOPERS SHARES BY SIZE RANGE 2016/17 56 TABLE 41: LEADING HOUSING DEVELOPERS WITH 500 + COMPLETIONS IN 2016/17 57 TABLE 42: BARRATT DEVELOPMENTS SUMMARY OF COMPLETIONS DATA 2016 & 2017 58 TABLE 43: BARRATT DEVELOPMENTS - COMPLETIONS BY REGION 2017 58 TABLE 44: PERSIMMON GROUP SUMMARY OF COMPLETIONS DATA 2016 & 2017 59 TABLE 45: BERKELEY GROUP SUMMARY OF COMPLETIONS DATA 2016 & 2017 60

TABLE 46: TAYLOR WIMPEY SUMMARY OF COMPLETIONS DATA 2016 & 2017 60 TABLE 47: BELLWAY HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 61 TABLE 48: REDROW HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 61 TABLE 49: BOVIS HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 62 TABLE 50: LINDEN HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 62 TABLE 51: CREST NICHOLSON SUMMARY OF COMPLETIONS DATA 2016 & 2017 63 TABLE 52: COUNTRYSIDE PROPERTIES SUMMARY OF COMPLETIONS DATA 2016 & 2017 64 TABLE 53: KEEPMOAT HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 64 TABLE 54: KIER LIVING SUMMARY OF COMPLETIONS DATA 2016 & 2017 65 TABLE 55: MILLER HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 65 TABLE 56: MCCARTHY & STONE SUMMARY OF COMPLETIONS DATA 2016 & 2017 66 TABLE 57: CALA SUMMARY OF COMPLETIONS DATA 2016 & 2017 66 TABLE 58: AVANT HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 67 TABLE 59: TELFORD HOMES SUMMARY OF COMPLETIONS DATA 2017 & 2018 68 TABLE 60: TELFORD HOMES SUMMARY OF COMPLETIONS DATA 2016 & 2017 69 TABLE 61: ST MODWEN HOMES SUMMARY OF COMPLETIONS DATA 2017 & 2018 70 TABLE 62: LARGER HOUSEBUILDERS IN LONDON & THE SOUTH EAST WITH ANNUAL COMPLETIONS < 500 72 TABLE 63: LARGER HOUSEBUILDERS IN NORTHERN REGIONS WITH ANNUAL COMPLETIONS < 500 73 TABLE 64: LARGER HOUSEBUILDERS IN SCOTLAND WITH ANNUAL COMPLETIONS < 500 74 TABLE 65: LARGER HOUSEBUILDERS IN MIDLANDS AND EAST ENGLAND WITH ANNUAL COMPLETIONS < 500 75 TABLE 66: LARGER HOUSEBUILDERS IN SOUTH WEST WITH ANNUAL COMPLETIONS < 500 75 TABLE 67: LEADING HOUSING ASSOCIATIONS IN THE BUILD-TO-RENT SECTOR 77 TABLE 68: LEADING HOUSING ASSOCIATIONS DEVELOPING HOUSING 78 The 'Housebuilding Market Report - UK 2018-2022' costs 845+VAT (if applicable) for a PDF version. Other formats are available - click here for a information about available report formats. All AMA reports are sold with a

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