Richard Payne: COVID-19 has knocked the construction industry sideways
The coronavirus pandemic has “knocked the construction industry sideways” according to Richard Payne, director of development at Oblix Capital.
Looking back to the beginning of March, the government’s plans for the future were to build one million homes over the next five years and with intentions to increase that number to 300,000 per year.
Furthermore, Payne said that budget and post-budget announcements heralded upwards extensions being included within Permitted Development Rights by the summer, and a review of planning permission was also promised.
However, due to the current outbreak Payne added that in order to achieve the targets above, a new approach is required.
The pandemic has caused building sites across the country to close, and it is still undetermined when they will reopen.
Payne said Brexit had already caused labour and skills shortages within the UK construction industry.
He added that coronavirus has brought new complications, such as workers being off sick due to catching the virus once the sites re-open, or continuing to self-isolate.
In addition, Payne believes that surveyors and valuers may be in temporary short supply, and supply chains will take time to “get back up to speed”.
Consumer confidence will also be impacted and building societies may well take a time to come back to the domestic mortgage market, he added.
Payne said: “These are uncharted times. One key difference from the financial crisis we experienced in 2008 is the strength of the banking industry at the time; in 2008 the banks and their lending practices, particularly in the USA, were a cause of the problem.
“This time round, the banking industry is financially robust, and high street and specialist lenders alike will be part of the solution, not the problem.
“Once the dust has settled, they will play a key role in getting the industry back on track.”