But activity set to pick up again later in the year as wider economy rebounds from the pandemic

Housing is set for a mid-year slump following the end of the stamp duty holiday and the first phase of the Help to buy scheme on 31 March, according to a Construction Products Association survey.

The end of the government schemes are expected to put the brakes on a still thriving market which was seeing higher levels of mortgage lending and property transactions at the end of last year than before the pandemic.

Housing suburb 111720

The CPA’s Winter Scenarios forecast expects demand for private housing to moderate in the second quarter with the end of the furlough and self-employment support schemes in April potentially contributing to the downturn if it results in a sharp rise in unemployment.

Activity is then expected to pick up once again in line with the a recovery in the wider economy throughout late 2021 and 2022.

The private housing repair and maintenance sector could also suffer from the end of the government support schemes after experiencing a boom year in 2020 as households invested accumulated savings from reduced daily expenditure back into homes.

Meanwhile, public housing repair and maintenance is expected to be driven by cladding work over the next two years as the government’s Building Safety Programme moves beyond the removal of combustible Grenfell Tower-style cladding.

The forecast expects a ‘W’ shaped recovery in other construction sectors with a rebound anticipated in the second quarter following the impact of the covid-19 vaccine rollout before a second dip in the summer after the furlough schemes come to an end. 

Overall construction output is expected to rise by 14% this year following last year’s 14.3% contraction, although activity is not forecast to return to pre-pandemic levels until 2022.