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Will 2017 be a good or bad year for residential construction in the UK?

2016 has gone and the new year is upon us. But what does 2017 bring for the residential construction sector?


Dominating the housebuilding industry news and colouring the confidence and uncertainty for 2016 and now 2017 is that huge Brexit question mark. No, you are not alone, but many of you are still finding it difficult to see what the real long term effects will be on the construction of new homes across Britain. If you enjoy the dark and clouded views of pessimistic articles then perhaps you’ve read ones like 3 devastating charts show how Brexit is about to kill house prices. Or perhaps you like to ignore the doom and gloom and prefer to absorb yourself in rose tinted views, for example Brexit vote sees demand for new homes soar, housebuilder says …


There’s a mass of answers being given to the many questions which have (and haven’t) been asked. You may recall the global oil price changes which happened just after the Scottish Independence referendum, if the timing of this was different maybe the voting would never have been as close. Perhaps in 2017 factors like this will surface which won’t be considered until after the effects have started changing the sector.


Whilst we are certainly a specialist in the high rise residential construction sector, we don’t confess to having all the answers in the balcony field (not quite yet anyway!) let alone the effects of economics, politics, technology, etc. on the macro environment of the industry at large. So here’s a small collection of questions which perhaps summarise just a tip of the iceberg of uncertainty;


  • How will the Pound weather 2017 and how will it affect investments?
  • Will the forecasted drop in sales of homes across the UK happen?
  • Does the slowdown of London’s luxury housing market mean a slowdown of new development or will it swing the balance towards higher density, lower property pricing?
  • Will the industry skills shortage be improved or worsen with Brexit?
  • Will housebuilder’s share prices change for the better now?
  • Will the sector behave differently in the South to that in the North like it did after the global financial crisis?
  • Will the formation of a new American government increase or reduce overseas investment in the UK housing market?
  • How will the drive for more offsite production change residential developments?
  • Will the market move more from private sales towards PRS?
  • Will contractor and subcontractor prices remain suppressed and tender negotiations cutthroat?


And what about the host of government initiatives?


  • How will the £3 billion housebuilders fund designed to lend to small-scale developers be seen?
  • Will there be even more of a trend of office to residential renovations with the removed planning constraints?
  • Will the Help to Buy scheme continue to run and succeed in increasing opportunities for the sector?
  • Will the fresh announcements of a fund to support the 3 garden towns and 14 garden villages assist in accelerating development and avoiding delays?
  • Will the £1.2bn Starter Homes Land Fund support the acquisition, remediation and de-risking of suitable land for starter home developments?


Only time will tell in answering these questions, but here at Sapphire we’ve been working on an exciting new strategy which is considerably different to last year’s as we embrace the ever-fluctuating dynamics of the high rise residential sector with a determined drive for novel, effective and game changing innovation


Whether you feel it’s either gloom or boom; 2017 is a new year, a different year and a year which is likely to bring substantial change.


Now it’s over to you to answer for yourself; how soon? How substantial? Positive or negative? You say…