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Home Tradesman Insights Signs of a slowdown hits the housing market

Signs of a slowdown hits the housing market

With a looming recession and continued interest rate hikes, it’s set to be an unpredictable twelve months.

Bellway homes has recently reported expected losses, with sales competing with a struggling financial outlook. In fact, it’s been a roller coaster year for the building company. Profits fell 36.5% in 2021 due to a £345 million payout to the Building Safety Levy.

And it was only a few months back that Bellway announced record revenues, with demand for homes at an all time high. However, with the cost of living crises and recession fears kicking in, sales have begun to stabilise.

A drop in sales maybe offset by the changes to stamp duty, which should encourage first time buyers. Then again, with the UK lacking an economic plan, and mortgage rate increases, there will be challenges ahead.

Building safety repairs levy

Changes to the Building Safety Act were implemented in April 2022, in light of the Grenfell Tower fire that saw many lives lost. Bellway’s payment will make up part of the £5 billion levy needed to fix unsafe cladding on buildings over 11m high.

Since 2017, checks have been made to thousands of new and existing home across the UK to asses if flammable materials were used to clad during their construction.

It was discovered that the issue is widespread and poses a significant risk to homeowners. As a result, properties with dangerous cladding have become unsellable and have left homeowners facing a bill in the ten of thousands of pounds to fix the error.

This year, the government stepped in forcing developers to fit the bill and absorb repair costs.

Other changes to the Safety Bill support include leaseholder rights, regulation to supply and marketing of construction products, and building safety measures, such as:

  • Acting as quickly as possible to fix buildings
  • Implementing new proportionate guidance on building safety
  • Regularly reporting to leaseholders and government on their progress
  • Respecting an independent dispute resolution process established by government; and
  • Refunding money already received from the taxpayer to fix their buildings.

As well as the above, additional controls require tradespeople to meet minimum qualifications and appoint an ‘accountable person’ on residential sites.

Tradesman Talk

Have you seen a slowdown in the construction industry? How will a recession impact your business?

As always, have your say in the comments below and click the social links to share this story.

Until next time, make sure it’s Tradesman Saver.

Mark McPherson

Mark McPherson has an MA in Creative Writing and has been crafting content for over a decade. He writes for a range of niches, including the construction industry and insurance sector. Mark has worked internationally as a content writer and teacher.

All articles by Mark McPherson

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