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Real estate industry

UK Housing Market Hits Decade-Long Low

Strategic Insights

— 2 min read

The UK housing market has reached its lowest level since the global financial crisis, with sales volumes at a 15-year low, according to a submission to the Treasury by Savills. The real estate firm's data shows that an average of only 0.3 homes were sold weekly per outlet across the UK, down from 0.7 in the 2010s. The malaise is worst in the East and the South East of England, where sales rates are at a dismal 0.25 homes per week per outlet.

Key Takeaways:

  • Sales volumes in the UK housing market have sunk to a 15-year low, with an average of only 0.3 homes sold weekly per outlet.
  • The equivalent sales rate reported by housebuilders at the bottom of the market in 2007-8 was 0.4 sales per outlet per week.
  • Even during the pandemic, sales volumes did not collapse to the current levels due to government incentives such as Help to Buy and the desire to move from urban areas to the countryside.
  • The malaise is worst in the East and the South East of England, with 0.25 homes per week per outlet being sold.
  • Housebuilding bosses fear that a lack of support for buyers means they will be priced out of the market, even if supply-side measures such as cutting red tape boost construction of new homes.
  • The government has been warned to address the concerns of the Land, Planning and Development Federation, which has raised the issue of low sales rates to the Treasury.
  • Housing secretary Steve Reed's mantra "build, baby, build" may not be enough to reverse the decline in sales volumes.
  • The government's plans to reduce minimum affordable-housing targets for new developments in London from 35% to 20% may not address the underlying issues in the market.

Statistics:

  • Average 0.3 homes sold weekly per outlet across the UK.
  • Average 0.4 sales per outlet per week in 2007-8.
  • Average 0.7 sales per outlet per week in the 2010s.
  • 0.25 homes per week per outlet being sold in the East and the South East of England.
  • 35% minimum affordable-housing targets for new developments in London.
  • 20% minimum affordable-housing targets for new developments in London (proposed change).
  • 1.5 million homes (government target for delivery in this parliament).

Sources:

  • Savills (real estate firm)
  • Land, Planning and Development Federation (LPDF)
  • The Treasury
  • Press release from the government (no specific date or reference given)

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