Short-term decrease in supply

Decrease in planning permissions, site commencements and building completions.

Lag time from economic shock

Previous economic shocks have had a time lag between the associated recession and a significant drop in supply.

Government interventions boosting demand

Significant government support has the demand for new property to continue to be expressed.

Hampshire Land Supply 2020

The year 2020 was like no other; suffering from a global pandemic, political earthquakes and lingering uncertainty from the future trading status with the European Union.  This research provides an update on the quantitative supply position of land across Hampshire (including Southampton and Portsmouth) for the period 1 April to 30 September 2020 utilising the monitoring and analysis undertaken by Hampshire County Council’s Land Supply Team.

 

Residential

Key findings:

  • There has been a short-term decrease in commencements and completions.  It is reasonable to assume that the impact of the first lockdown in late March through to early July had a significant impact on the ability of developers to carry on working on site. Some of the decrease, particularly in new planning permissions, may also be attributed to the continuing uncertainties arising from Brexit and the confidence that developers had in the market at the beginning of the year.
  • The longer term impacts of the pandemic are unclear.  The period observed in this report is largely reflective of a market where previous expressed demand is being met by supply that was already contractually committed to. As the country moves forward, out of the pandemic, and into a period outside of the European Union, the demand side impacts will potentially have an impact on the development industry – but will this continue in the longer term?
  • Indeed, history suggests that previous economic shocks have had a time lag between the associated recession and significant drops in housing completions. Is this trend likely to be repeated this time?
  • The government’s interventions into the housing market in response, particularly the suspension of stamp duty for the first £500,000 of any residential property (and less directly the introduction of the ‘furlough scheme’), have potentially enabled the demand for new housing to continue to be expressed.  However, these measures are currently time-limited and as such it will be important to continue to monitor the permission and delivery of new housing over the coming months.

 

Dwelling Completion Total in Hampshire – Annual

Dwelling completions in Hampshire for the previous two years (2018-19 and 2019-20) have been the highest observed in Hampshire for over 20 years. These figures follow on from five years of annual increases from the very low figures seen in 2012-13 and 2013-14 where completions dipped below the 5,000 dwellings mark following the tail-end of the previous recession. The 10-year average between 2010 and 2020 for dwelling completions was 6,510 with the last 5 years annual completions all being above the 10-year average. Between 2012-13 (4,532 dwellings – the lowest recorded figures over the 10-years) and 2019-20 (8,680 dwellings – the highest recorded figure in the last 10-years) there was a 91.5% increase in dwelling completions recorded.

 

Commercial

Key findings:

  • There has been a significant short-term decrease in permissions for the period April-September 2020 representing the lowest figures compared to the latest 5 year average.  The causes are uncertain but it is reasonable to assume the impact of the first lockdown was a contributing factor.
  • The longer term impacts of the pandemic are unclear but historic data suggests that previous economic shocks have had a time lag before significant drops in completions are shown.
  • The first lockdown, whilst likely contributing to a decrease in permissions appeared to have limited impact on overall construction activity that was already underway.  The pace of construction activity appeared to slow but not stop.

 

Office and Industrial Completions (Gross B1, B2, B8)

During the period 2005-2020, an average of 126,855m2 of new employment floorspace per annum was developed in Hampshire, as illustrated. The graph also illustrates particularly low completions in 2011-12 of approx. 38,000m2 and approximately 32,000m2 in 2012-13 which are the lowest recorded by HCC in any one year since the start of monitoring in the 1980s. This can be attributed to a lag to the full impact of the Dec.07 to Jun.09 recession, following a similar pattern to previous economic shocks.  This may assist in providing us with a possible scenario of what may happen this time around.

 

Download:

 

Hampshire Residential Land Supply 2020

Download the full Residential report.

Hampshire Commercial Land Supply 2020

Download the full Commercial report.

 

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James Ansell
Senior Officer, Land Supply (Residential)
Hampshire County Council

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Rob Marshall
Senior Officer, Land Supply (Commercial)
Hampshire County Council

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Andrew Lubman
Senior Officer, Regeneration and Development
Hampshire County Council