Work on social
housing construction projects is expected to rise over this year and into 2020.
Increased support
for shared ownership developments that were announced in the last Budget are
expected to provide a stimulus. Projects disrupted by the 2017 Grenfell tragedy
are also expected to begin moving onto site.
In the three months
to July 2091, the underlying value of social housing projects starting on site
surged 40% according to Glenigan’s construction market analysis.
Glenigan’s economics
director Allan Wilén says: “A brighter outlook for project starts is forecast
for 2019.”
After an 11% fall in
the underlying value of social housing starts in 2018, a rise of 2% is expected
this year according to Glenigan’s construction market research. A further rise
of 3% is anticipated in 2020.
Registered social
landlords (RSL) are gearing up for a rise in starts with a swathe of projects
out to tender according to Glenigan’s data.
These range from a
£22 million proposal for more than 200 homes in Plymouth by Clarion
(Glenigan Project ID: 17297003) to a £7 million scheme in north London for 32
flats by Christian Action Housing
Association (Glenigan Project ID: 16447272).
Glenigan’s
construction analysis shows that Clarion is the biggest spending RSL in the 12
months to July 2019.
The group, which was
created in 2016 through a merger of Affinity Sutton and Circle, had awarded
work worth £301 million in the past year.
This spending placed
Clarion in 14th place in Glenigan’s ranking of the overall construction
industry’s biggest clients. Another three RSLs – Southern Housing, Notting Hill
and Places for People – also feature amongst the construction industry’s 50
biggest clients.
Glenigan’s data
suggests that much of this workload may come from schemes already with planning
permission.
The underlying value
of social work gaining approval sagged in the quarter to July 2019, but this
reflects RSLs reviewing and changing priorities and should not stop work
rising.
Mr Wilén adds:
“Progress of planned developments has been disrupted over the last two years as
housing associations have reviewed the implications of the Grenfell fire for
refurbishment and new build schemes.
“This is evident in
an 11% decline in the value of apartment projects that secured planning
approval during 2018. In contrast, the value of housing projects increased 5%.
“Overall, the value
of detailed planning approvals for affordable housing projects stabilised last
year. This is expected to support a modest improvement in affordable housing
project starts during 2019 as projects reviewed in the wake of the Grenfell tragedy
start on site.”
With a strong
pipeline of approvals in place and RSLs planning to build more homes,
opportunities should continue to emerge in the social housing sector over the
next couple of years.
