Market Update 2018: UK Housing Sector Up
Posted by Stuart Hackett on Tuesday, January 23, 2018
Recent news in the UK might have left some employees in the construction industry taking a look at their own position and ask themselves - Just how secure is my job? Here I want to take a look at the UK Housing sector as it’s one of the more secure sectors of construction in 2018 and beyond.
I suppose in the back of my mind, I had it in my head that the Housing sector was quite volatile at the moment and was struggling slightly. I remember the headlines immediately after the Brexit vote in June 2016, that UK House Builder share prices were plummeting.
Despite me receiving a healthy number of vacancies from UK based Housing Developers during 2017, I'd possibly underestimated the sectors performance. In fact, there was plenty to shout about in the last year and a half have proved the markets wrong for doubting the UK housing sector post Brexit.
Sales of homes generally have risen steadily since the UK started recovering from the last economic crisis circa 10 years ago. According to the Office of National Statistics, house prices have continued to grow reasonably steadily at circa 5% for a number of years now.
These factors, as well as government assistance from the 'Help to Buy' scheme have lead the Housing sector to be a reasonably safe sector of construction to be involved in recent years.
The Housing sector certainly entered 2018 on a positive note. It was reported in issue 2 of Building Magazine that Persimmon have announced that 2017 profits will be "higher than expected". Their sales rose 9% from 2016 and the average selling price rose 3% from 2016. We've since heard similarly positive reports from other national house builders.
Experian recently published statistics suggesting that Public (6%) and Private (3%) Housing would see the most annual average growth of any sector between 2018 - 2020, with the exception of the infrastructure sector (7%). That's quite a positive statement with huge infrastructure schemes such as HS2 likely to be contributing heavily to those forecasts.
Add to the above the pressure on government to build more houses in the UK during this term and with all the information above, I would feel confident about recommending the UK housing sector as a stable sector to be employed in for 2018.
However, be aware that many of the major Housing Developers saw their share prices take huge hits once again in early January. On the 10th January 2018 shares in Taylor Wimpey dropped by 4.5%, Persimmon 2.9%, Barrett Developments 2.1% and Berkley 1.7%. (Source: Financial Times online)
There's a number of factors that can could contribute to why the markets feel less positive about some of the major house builders for 2018. One of which is reports that margins could fall due to a slowdown in the price of houses in 2018.
We'll have to wait and see whether some sharp falls in share prices are anything to worry about going into 2018, however the records show that the UK housing sector has seen consistent growth for almost a decade now and even amidst fears immediately after the Brexit vote, the sector has continued to perform well, offering construction workers plenty of opportunity.
From a purely recruitment point of view, I'm still seeing positivity and a large number of vacancies with the House Builder clients that I'm working with in and around the UK, meaning it's still business as usual for now.