The number of homes being built between April and June plunged as work on building sites was suspended.

The coronavirus pandemic led to a 62% fall in the number of new homes being built in England between April and June.

Only 15,950 new-build properties were finished during the three months, the lowest level since records began in 2000, according to the Ministry of Housing, Communities and Local Government.

It follows a 5% drop in building levels during the first three months of the year, which ended a seven-year period in which the number of new properties being built had been steadily increasing.

Brand new properties already sell for a significant premium compared with homes that are being re-sold, and the fall in building levels is likely to put further upward pressure on prices.

Why is this happening?

Work on construction sites was suspended in March when the UK entered lockdown in response to coronavirus.

When work was able to resume, sites opened in phases and builders had to observe social distancing measures, which reduced the speed at which properties could be built.

But with the UK now facing a second wave of coronavirus and employees once again being told to work from home where possible, construction workers have been given permission to continuing working as normal.

Who does it affect?

While the slowdown in building levels is bad news for anyone hoping to buy a new-build home, it has been particularly stressful for people planning to use the government’s Help to Buy initiative, which ends in its current form on 31 March 2021.

In order to qualify for the 20% equity loan, the property being bought through the scheme originally had to have been built by the end of December.

But the government has since extended the deadline for construction until 28 February 2021 to ensure people do not miss out as a result of building delays caused by the pandemic.

The current version of Help to Buy will be replaced by a new scheme, which is limited to first-time buyers, on 1 April 2021.

What’s the background?

A total of 147,180 new homes were built in the year to the end of June, 15% fewer than during the previous 12-month period.

But construction is only one way in which homes are added to the housing stock, with residential properties also created through the conversion of agricultural and industrial buildings, as well as dividing up large houses into smaller units.

Government figures show an overall increase of 243,720 homes in England during the period, at the lower end of the range of between 240,000 and 340,000 new homes that are needed each year to keep pace with demand.

Top three takeaways

  • The coronavirus pandemic led to a 62% fall in the number of new homes being built between April and June
  • Only 15,950 new-build properties were finished during the three months – the lowest level since records began in 2000
  • The deadline for Help to Buy has been extended to ensure people do not miss out as a result of building delays