Lack of labour slowing UK property construction growth

Lack of labour slowing UK property construction growth

73% of housebuilders believe the lack of labour is stifling the supply of new real estate units in the UK.

Summary:

  • A survey of British housebuilders finds growing sentiment that the lack of available labour is currently one of the biggest challenges in the UK property market
  • 73% of respondents state that the cost of hiring and finding new workers is significantly impacting on future housing supply
  • Manchester currently has a 2:1 demand to supply imbalance of rental property

The people responsible for building new homes in Britain fear the cost of hiring labour is impacting on the long-term supply of UK property.

73% of housebuilders responding to a new Knight Frank survey believe the struggle to find new labour will have a negative effect on future new build targets. 56% also said that they hoped to hire more skilled workers by 2019.

Huge efforts are currently being made across the UK to increase the supply of new homes. While David Fenton, Head of Regional Land at Knight Frank, believes although overall sentiment in the market is positive, the results of this survey raise concerns over the availability of labour and constructors’ ability to meet targets.

He said: “The sentiment among housebuilders in the UK remains positive. The only dark cloud is build cost inflation and labour shortage, both of which are hampering delivery.”

In addition, many developers are currently lamenting the availability of suitable land. 57% of respondents reported that they have not seen an increase in access to public sector land available for development.

Housing supply across the UK remains low. Investors have seen demand for their rental properties soar, but the lack of new homes coming onto the market means their asset is also able to command strong rental premiums.

Nowhere has this been more noticeable than in Manchester, the UK’s hotspot for property investment yields. The demand to supply imbalance of rental accommodation in the city currently stands at 2:1, as a population growing at three times the national average competes for available units.

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