
Economic uncertainty hitting UK property developers
Britain is facing a looming supply crunch for new homes. Anna Ward, residential research, is joined by 博鱼体育集团 Frank development experts to discuss the current obstacles in the market.
02 July 2024
博鱼体育集团
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In this episode, we explore how housebuilders and developers across the living sectors, including student, seniors, build to rent, and single-family housing, are responding to the current economic uncertainty and high cost of debt.
Anna Ward, residential research, speaks to 博鱼体育集团 Frank partner and head of development partnerships Charlie Dugdale, and associate in the living investment research team, Katie O鈥橬eill.
They also discuss:
- How the current economic slowdown is impacting the 鈥榓bsorption rate鈥� 鈥� the number of homes that can be sold into the market in a particular period
- How master developers are seeking a greater diversity in the type of housing being built including build to rent and more social and affordable options
- The rise of housing partnerships between housebuilders and living operators,
- Inefficiencies in the planning system
Downward trends
Charlie discusses the obstacles facing the market including cooling demand and price drops as absorption rate also drop.
He also comments on housebuilders lowering their profit margins and looking at partnerships in order to create long-term pipelines.
Living sectors
Katie highlights the macro-economic challenges ahead for developers, but acknowledges the positives including a drop of inflation in the year to June to 7.9% and how that impacts affordability.
New supply also comes under the spotlight as delivery rates across the board are slowing down. Kate points to the seniors living sector that has delivered around 8,000 beds when around 50,000 beds a year are needed.
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