Lloyds housebuilding report forecasts growth

Lloyds housebuilding report forecasts growth

The second annual Lloyds Bank Commercial Banking report indicates that despite uncertainty following the EU Referendum housebuilders continue to forecast growth.

Despite challenges including the current planning system, a skills shortage and uncertainty following the EU Referendum, housebuilders are forecasting increased growth and investment in the sector.

The second annual Lloyds Bank Commercial Banking report on the UK housebuilding sector analyses the state of the industry today, and the opportunities and challenges it faces in the future.

The report indicates that although over a third of firms (36%) said that the uncertainty following the EU referendum result is the biggest challenge to their business, the industry is relatively optimistic; planning to grow, invest and create jobs.

Confidence to invest
The research found that, in the face of ongoing uncertainty, optimism about the future of the housebuilding industry has picked up slightly from 7.1 last year to 7.2 in 2016, with 10 representing the highest level of expectation.

 It seems that this outlook has given the industry the confidence to invest, with average five-year investment plans up 17% year on year.

Housebuilders are also confident about growth, with 42% of respondents saying that their growth forecasts had improved since the EU vote, compared with 27% who said they had declined. They are now predicting an average growth of 28% over the next five years, up from 25% last year.

Pete Flockhart, Head of Housebuilders, Commercial Banking, Lloyds Bank, said: “Given the challenges that housebuilders face, the sector is painting a relatively optimistic picture, with improved growth and investment forecasts compared with last year’s survey.

“The wider uncertainty, coupled with the rising cost of materials, presents some challenges but the industry is taking steps to tackle these issues head on, and still plans to grow. Businesses are confronting the much-mooted skills shortage and it is encouraging to see that almost half of the industry is making staff training a key focus and nearly a third is prioritising apprenticeships.”

Stewart Baseley, Home Builders Federation, said: “The industry is pushing the skills agenda hard. If we are to build more high quality homes we simply have to increase industry capacity. We are looking at how we build our individual sites more quickly; and the measures Government could introduce to allow SME builders to play their part in delivering more homes.”


Survey of 100 English, Scottish and Welsh businesses from across the housebuilding supply chain conducted by Coleman Parkes Research in August and September 2016.

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