UK private housebuilding is predicted to fall about 3% in 2027, delegates heard during the Timber Development UK Global Markets Conference in central London on November 4.
A key takeaway at the conference, attended by about 180 people, was private housebuilding and RMI were set to fall in H2 2026 and Q1 2027, with a gradual recovery from 2027 H2. Delegates also heard how European sawmillers were under increasing pressure from “bad” markets.
Professor Noble Francis, economics director at the Construction Products Association, said: “It’s a challenging market out there and it’s going to remain difficult or at least the next six months. At the end of next year, it is likely to be better but it probably won’t be a rapid increase.
“For the first half of next year, housebuilding is likely to be very difficult, then we expect a slight recovery in H2, but it will not be enough to offset the decline in H1.”
The OBR expects the ‘Your First Home’ scheme to have only a marginal impact on housebuilding. Savills Research said the new “Your First Home” government equity loan scheme is projected to support 5,000 new home completions during its first year of activity (2027–28), and 10,000 in the year after.
But Prof Francis said the scheme doesn’t start until April 1, so first time house buyers are likely to wait until then, creating a limbo in first time buyer activity.
He also said the Government’s 1.5 million new homes target was “irrelevant”.
“The Government’s key problem is not the 1.5 million new homes target; it is to stop housebuilding falling next year.”
The CPA’s Autumn Construction Forecast puts private housebuilding at -10% for 2026 and -8% for private housing RMI work. The forecast for 2027 is -3% and -2% respectively.
UK GDP in 2026 expected to be 1.1%, with 0.9% for 2027.
Meanwhile, another keynote speaker Sampsa Auvinen, chair of CEI-Bois, painted a challenging picture of European and global sawn timber markets.
“The market is really bad, orders are weak and log prices are high, especially in Sweden,” he said.
Softwood export markets were fragmented, he added, with Gulf business down by 33%, China also down, while North America was flat. In North Africa, Egypt and Algeria saw growth.
“There are too many mills, not enough logs and not enough customers for the mills. The margins are just too low. And there is nothing at the moment that tells me there is going to be an easing in the costs.”
Key points raised by Auvinen include:
• Nine out of 10 Swedish sawmills estimated to be on negative margins
• EU sawmill production down by 12.5 million m3 in the period 2021-2026
• An estimated 1 million m3 needs to be taken out of production in South Sweden alone.
• Q4 offerings point to a softening of timber prices
• Sawmills will produce more pine due to spruce availability issues
But he reported some light at the end of the tunnel coming from Germany, with a 15.1% increase in homebuilding permits in H1, 2026.
“If this continues it will create more demand in the next 12-18months. It will be one to watch.”
