Real estate loses £262m per day

The real estate sector is shrinking by £261.5m per day during the lockdown, new research has found. Real estate’s gross value added (equating to its total value of goods and services) has declined by 24% to £836.1m per day, according to findings from law firm Irwin Mitchell and the Centre for Economics & Business Research. This has fallen from £1.1bn per day before the government introduced lockdown measures. The UK economy is losing £2.7bn per day in absolute terms owing to the lockdown, while its GVA is falling by 34% per day. Construction takes £302m daily hit Accommodation and food is among the worst-hit UK sectors, alongside manufacturing and construction. Construction is losing £301.5m per day. Its GVA has plunged by 65% to £160.6m per day, from £462.1m per day from before lockdown. The report showed that construction has particularly struggled in Scotland, Wales and Northern Ireland where, unlike England, all construction sites have been closed. Consequently, GVA in these areas has fallen by 90%. In Scotland, the construction sector posted a daily GVA of £40m before the Covid-19 crisis, which has now fallen to £4m a day. Despite these negatives, the report maintained the UK has been in a relatively good position to face lockdown, as a significant share of the economy is comprised of the financial and insurance services sector. This is estimated to be experiencing an 18% daily reduction in GVA, which is comparatively low. The report noted that this sector can largely be operated remotely, although there has been some loss in productivity. How regions performed London’s economy on the whole is estimated to be losing £575m on a daily basis as a result of the lockdown. However, the East Midlands has been the worst affected by the crisis, after posting the biggest decline in GVA (39.7%). The region is losing £164m per day, worsened by its reliance on manufacturing, which is posting a 75% daily decline in GVA. Adrian Barlow, national head of real estate at Irwin Mitchell, said: “Coronavirus is affecting sectors of the economy differently and this means that regional economies will recover at different rates when the lockdown restrictions are reduced. “Given the massive impact on the construction sector and negative impact on real estate it is vital that these restrictions are lifted at the right time and the government supports different sectors accordingly and does not deviate from its crucial ’levelling-up’ agenda.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette