New-build sales for agents in jeopardy as construction flatlines

New builds are set to slow down drastically next year, as the economy enters more turbulent times, according to chartered surveyors.

The market is already “losing some steam” with interest rate raises and inflation both taking their toll, the RICS says.

Recent political chaos with changes of Prime Minister and other senior Cabinet positions including Chancellor, has also added pressure to the new build industry.

An building boom after the Covid lockdowns, is now evaporating and the number of new builds is flatlining, RICS reports.

The news of a slowdown casts further doubt on the Government’s ability to hit its target of 300,000 new homes built every year.

Turbulent

“Turbulent economic conditions, including the rise in interest rates and inflation both domestically and internationally is impacting across the market,” says RICS (Royal Institution of Chartered Surveyors) in its UK Construction Monitor for Q3, 2022.

“There are several difficulties facing the industry, and [survey] respondents cited shortages in materials and labour, alongside increasing financial constraints.

Also, more than half of respondents quoted a lack of quantity surveyors as a key factor holding back construction activity.

Simon Rubinsohn, chief economist at RICS, says: “The impact of the shift in the economic outlook is most visible in the residential and commercial sectors where workloads are now viewed as likely to flatline over the coming year.”

A similar report by data firm Glenigan also paints a gloomy picture about the outlook for new builds. It found that the value of projects with detailed planning consent fell 5% this year compared to 2021.