Self-build market estimated to have fallen by 10% due to Covid-19 pandemic
As a result of the Covid-19 pandemic, the Self Build market is estimated to have fallen in value by some 10% in 2020. It is estimated there were 13,900 completions, with a market value of around £4.3bn.
Self-build demand in the UK varies significantly dependent on the location, the level of available plots does not necessarily reflect the population therein. Alex Blagden, Senior Market Research Analyst at AMA Research comments “there is a strong disconnect between where people want to self-build and where there are sufficient numbers of available sites. There is a relatively larger number of applications for self-build projects in the Home Counties and the South West compared to the numbers of available sites. In contrast, the highest number of sites available for self-builders are in the Highlands and Grampian areas of Scotland, Northern Ireland and the South West but these areas attract a relatively smaller number of applications”.
In 2020, the government announced a review of self-build housing, including reviewing the effectiveness of the Self-build and Custom Housebuilding Act 2015, to make it easier for people to build and commission their own homes by encouraging councils to grant planning permissions for projects. This includes £2.2 billion of new loan finance to support house builders, which includes: delivering a new Help to Build scheme for custom and self-builders; funding for SME housebuilders and Modern Methods of Construction (MMC); £100 million of funding to support, among other things, the release of public sector land, including serviced plots for self and custom builders.
Confidence remains a key factor which can affect not only the value of self-builds but also the types of construction and finishing materials used. Whilst some potential self-builders may choose to defer projects until economic times are more certain, the self-funded self-builder is more than likely to continue with plans for their project regardless of the current economic uncertainty.
Residential land values vary considerably across the UK and have become increasingly polarized between higher the very high levels in the South East and the rest of the UK. For the most part, variation in land costs is related to the availability of self-build plots within key areas.
Over the next few years to 2024, the growth of this market will be greatly affected by how long the Covid-19 pandemic lasts and how quickly the economy, and the construction industry in particular recovers. Although the Government has recently announced additional support for self-build, the issue of appropriate and sufficient finance remains a key factor determining the future value of the market.
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