Look back through 2020 with LABC Warranty, a year that has challenged the housebuilding sector like no other…
For July to December 2020, click to Part 2.
While a virus outbreak in China was nothing more than that, here in the UK there was fresh optimism for the year. The country was fresh off the back of a general election, with a government that appeared ready to ditch austerity and ‘level up’ the north of England with ambitious plans to spend and build.
Brexit was the biggest talking point. Among the raft of New Year predictions, the monthly IHS Markit/CIPS UK Construction PMI report concluded that: “Survey respondents cited confidence that a more predictable domestic political landscape and clarity on Brexit could deliver a much-needed boost to clients' willingness-to-spend in 2020.”
We’ll come back to that later…
Meanwhile, it was very much business as usual at LABC Warranty. We encouraged our customers to promote the Consumer Code for Home Builders as a further way of demonstrating a commitment to quality. And like most organisations, we were looking forward to 2020.
LABC Warranty reported from the New Homes Review survey which revealed more than a third of buyers of new homes had previously bought older homes. In addition to possible downsizing, buyers were attracted to the low maintenance costs and reduced fuel bills of newer houses. Could this be a growing trend as a greater proportion of the UK population enters middle and old age?
In related housing news, a consultation on a significant uplift for energy efficiency in new homes concluded with some commentators claiming that aspects of the proposals might be a step backwards. Even so, the days of new domestic gas boilers appear to be limited. As we go to press we are waiting to hear the outcome of the Part L consultation.
Meanwhile, the outcome of another consultation concluded and the government confirmed its intention to introduce a New Homes Ombudsman. The scheme is expected to be introduced in 2021 and it will be a statutory requirement for developers of all new-build homes to join.
News of significant Covid-19 outbreaks in Europe, especially Italy, were coming through daily. Yet March was a busy month even without the spectre of the spreading virus.
Chancellor Rishi Sunak delivered his budget for 2020, the first of two major announcements he would make this month. There was a £30bn fund announced to help the construction sector through the now-anticipated virus crisis – though much more was to come, of course. There was a £12bn fund for affordable homes and money promised for flood defences, heat networks and for removing unsafe cladding. Phase 2 of the Grenfell Tower Inquiry began this month.
With announcements coming thick and fast that would have some bearing on home builders, LABC Warranty published a guide to housing policies to help developers keep track.
And then Boris appeared on national TV one evening and almost everything came to a halt. The national lockdown was announced, a furlough scheme was quickly introduced, and many businesses either scaled back or stopped working altogether.
Very few people were on construction sites at this point. So it wasn’t long before reports began to circulate about the potential hit to the home building sector. Knight Frank claimed that house sales would plummet by half a million (a 38% fall), leading to stamp duty and VAT losses in the billions.
LABC Warranty maintained a reduced working presence as we sought to work with a few house builders that made tentative steps to return to their construction sites. Behind the scenes, our technical experts published the latest edition of our Technical Manual. Now arranged into sections reflecting traditional ‘build parts’, the ninth version of our manual features nearly 500 pages of detailed technical guidance. By the end of 2020, more than 10,000 people had viewed a digital copy of it.
The sector recorded a huge slump in construction as most of the industry ground to a halt and many workers were furloughed. My mid-month, with Covid-19 cases beginning to fall a little from their record highs, the Government announced plans to restart the housing market. There was growing understanding that, with suitable precautions, people working in outdoor areas could resume work. Some housing sites restarted, but many suppliers remained closed.
LABC Warranty continued to operate site inspections via a remote service but gradually our risk management surveyors, working under continuously updated and closely monitored operating procedures, began to return to sites. It was difficult but work was gradually returning, even though it remained nothing like it had been in February.
The majority of the house building sector continued to take small steps back to work. Joining England there was a partial reopening of the housing market in Wales, but the differing circumstances across the UK set the tone for the remainder of the year.
Millions of workers were still furloughed but those that returned to work did so under challenging circumstances, with social distancing via home-working required for many. LABC Warranty’s services were resuming too, with work continuing on making our head office Covid-19 compliant as the rules on safe working emerged.
Pent-up demand was evident by now, as June became our busiest month of 2020 (and 2019) for new orders.
- Click to Part 2 for July to December 2020.