For those who are self employed in the construction industry, Covid-19 continues to bite, leaving them uncertain of their financial future.
With property sales currently on pause, developments at an effective standstill and construction stopped, the industry as a whole is on hold, affecting every sector of the property industry. This is likely to continue for a significant time, and even when some sort of normality returns, it could take time for the industry to recover.
Pure Commercial Finance have researched the market, and predicted the problems that self-employed contractors could face going forwards:
Savills has reported that construction that was due to take place on sites that had capacity to build nearly 80% of the housing supply has now been paused. Expectedly, this will lead to a huge drop of houses that will come to the market in the next year.
Private developments are expected to half, if sites are closed until July, which has been predicted. This would mean that the output of homes would only be 10,000 instead of the normal 22,000, CBRE told the Financial Times.
There have been many predictions about the property market, with many thinking it will go into a deep freeze. Knight Frank has forecasted that property sales in the UK will go from 1,175,000 last year, to just 732,000 in 2020.
There are also expected to be 350,000 fewer mortgage approvals in both England and Wales, including 150,000 less first-time buyers.
Chris Evans, Head of Specialist Mortgages at Pure Commercial Finance says:
“Lenders may be more reluctant to release their 95% LTV products, and as it stands, most lenders are only offering products that require larger deposits. Also, some lenders will choose to ignore overtime and bonuses when it comes to assessing their income until things die down, both of which will of course make it harder for first-time buyers to access a mortgage.”
Of course, these are all predictions, and nobody truly knows how the property market will look once the pandemic is over. However, it is safe to say the market is one of those that has been hit hard and has affected all developers, tradesmen and investors in the market.
Read more about coronavirus and how it will hit the industry in Pure Commercial Finance’s round up here.