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The number of active businesses within the residential construction industry could increase by 30% by 2025 and drive total market value to £93.6bn, according to research by property sales platform Unlatch.

If the forecast is realised, it would see a total of 57,401 businesses active in the residential construction industry.

According to Unlatch’s research, there are some 44,166 businesses operating across the UK’s residential construction industry at present, generating total revenue to the tune of £78.9bn with each business contributing an estimated average revenue of £1.8m.

Compared with pre-pandemic levels, the current number of businesses is down 7.1% while total market value is 11% lower, meaning average revenue per business has fallen by 4.3%.

However, according to Unlatch, annual figures are showing positive signs. For example, while the number of total businesses in the industry is 6% fewer than 2021, total market value and resulting average revenue per business are up 18.9% and 26.5% respectively.

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Unlatch has predicted this growth will continue over the coming years, with the residential construction industry’s value hitting nearly £94bn by 2025. However, the downside to this sector expansion would be that, with more active operators, the average revenue per business would decline by 8.7%.

Lee Martin, head of UK for Unlatch, commented: “Like many sectors of the property market, the residential construction industry certainly faced a number of challenges as a result of the pandemic. While we’re yet to see a full return to form, there are some very positive signs of growth on an annual basis, with the pandemic market boom helping to drive revenue growth.

“This growth is expected to continue through to 2025 and we predict that the biggest worry facing many in the sector will be an increased level of competition, rather than a dent to their profit margins.

“It’s those who continue to innovate and progress the way we deliver residential property to market that are likely to come out on top, not just with respect to the construction process, but also when streamlining the sales process, benefiting both builder and homebuyer alike,” Martin added.

By Jerome Smail

Source: Property Industry Eye

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