Self-build may be industry lifesaver
Published: 21 May, 2009
CHELTENHAM: 2008 was a traumatic year for the housebuilding industry in general, with overall completions in the UK over 30% down on 2007 and set to get even worse throughout 2009. The housebuilding recession has affected the self-build market and, while self-builders may generally be in a stronger financial position than most homebuyers, many have been reluctant or unable to generate funds in order to finance a project.
AMA Research's view of the self-build sector in 2008 is that the downturn in volume has not been as severe as that of the volume housebuilding market. Its recent report estimated that self-build completions in the UK have declined to an estimated 14 000 dwellings.
The market research company admitted that while it is difficult to be precise in volume terms of self-build homes, estimates indicate a market size of over 20 000 units. AMA said it believes that number to be "much lower when assessing the market in terms of the property owner having a significant influence in the design/build process".
Self-build, the report states, now accounts for around 8% of all new homes built in the UK. In recent government- commissioned reports, much has been made of the sector’s importance and significance as a proportion of total housebuilding.
However, self-build volumes are lower in the UK than most similar markets. The major difficulty facing those who wish to build in this way is the lack of available building plots.
At present, volume developers have virtually withdrawn from land buying. There is no indication to-date that this has freed up the availability of land for self-builders.
This market is worth £3.5bn, with material costs generally well above, reflecting higher build specifications.
Material and labour prices are likely to fall in 2009, as more skilled tradespeople become available, following the major reduction in staff by housebuilders and sub-contractors. Pressures up the supply chain are likely to see material prices fall.
While short-term prospects for the sector are likely to be difficult, self-build is unlikely to experience the same level of decline as the commercial housebuilding market.
As a result, AMA's forecasts are for a small downturn in volumes in the sector in 2009, before modest recovery. Restrictions in plot availability will remain the limiting factor to long-term growth.
AMA Research’s report Self Build Housing Market – UK 2009-2013 is available in hard copy or electronic format and can be ordered online at www.amaresearch.co.uk