Will the Construction Industry Suffer After Brexit?

In June 2016, just over half of the voting public voted to leave the European Union. In the years since, there has been uncertainty in so many industries, from airlines to the financial sector. As a result, there's concern that the construction sector will suffer. Should the industry be concerned, and what will happen next?

The Construction Industry Before Brexit

Before the 2016 vote, there was already a housing crisis happening in the UK. Housing charity Shelter has been vocal about the shortfall in housing for British residents. Right now, it estimates that 277,000 people are homeless on the streets of the UK, many because of the fact they couldn't afford privately rented homes. The price of renting in the UK is the reason many people can't afford new homes too, as their rent takes up so much of their income. As such, they're trapped in insecure housing with no way forward.

After the Brexit vote, there was an assumption by many that it had caused the housing crisis. Yet Sahel Majali of the Mid Group has pointed out that this crisis was in place long beforehand. He has also said that there's a serious need for starter homes, especially in London.

How Is the Issue Being Addressed?

Right now, there are several programs in place aiming to bring more housing to people in the UK. The government has pledged to have thousands of new homes built every year, so there will be more choice for those needing to buy a home of their own. With the influx of homes, the hope is that rent will become more affordable too.

There are also local authorities looking to improve the amount of homes in their areas. In some cases, they hadn't built new homes for more than 30 years. This is a promising start, one that should benefit everyone living in the UK.

Will Brexit Affect Construction?

As things stand now, it's clear that Brexit shouldn't negatively impact construction. The government has recognised that construction and housing is an issue separate from Brexit and needs to be addressed. In fact, most of their measures were brought in after 2016.

For now, there's no need to be concerned about the construction industry in the UK after Brexit. There are plenty of programs already underway, and the main issue of a lack of housing is being addressed by the industry.

UK Construction Remains in Rude Health

Recent reports suggest that UK construction remains in “rude health”, writes Sahel Majali.

The UK’s property market continues to provide developers with new construction up and down the UK, according to the Office of National Statistics (ONS).

UK house prices grew by 6.1% year-on-year for September, a 0.6% rise on the previous month. According to a recent study from Nationwide, doesn’t have enough residential property; supply is now lower than it’s been since the 1970s.

Rising demand

This high demand low supply ratio also characterises the UK’s commercial property market. The chief economist at the Royal Institute of Chartered Surveyors (RICS), Simon Rubinson, explained: “We’re seeing a solid increase in demand for commercial properties across retail, office and industrial sectors. In other words, at the moment, however badly rental costs might pinch, they do not appear a barrier to growth.”

Read in full on Sahel Majali's blog.