The latest research by tax specialists, RIFT, has highlighted how a cooling housing market is likely to cause a potential decline in construction employment levels for the first time since 2014 as recent figures show that housing delivery is down by -2.6% across the UK when compared to the pre-pandemic market.
So far in 2023, homebuyers are snapping up just 43% of available stock on the market, down from 60% in 2022 and 63% in 2021. This find is laboured by figures showing that mortgage approvals had already fallen by 20% between 2021 and 2022.
This is partly due to, following September’s mini budget, the number of higher loan to value products available to buyers was dramatically reduced. In fact, available mortgage products with an LTV of 85% or higher account for just 15% of all products currently available, meaning that buyers are having to stump up considerably higher deposits.
The lack of appetite amongst buyers is sure to subsequently deter developers from bringing stock to market at a time when their profit margins are likely to take a hit. The knock on effect of subdued housebuilder activity has resulted in less demand for those working within the construction industry.
The research found that while the 1.4 million currently employed in the UK construction sector is the highest total seen this side of the millennium, which has seen consistent year on year growth since 2015, the rate of growth has also been slowing steadily and in 2021, remained flat (0%) versus the previous year.
With the wider housing market now also on the turn, it is likely that the number of those within the construction sector could be set to fall for the first time since 2014.