Housing targets face increasing pressure from water shortages

The Environment Agency’s latest drought report for August shows that most river flow sites in England are reporting below normal or lower for the time of year, with 15 sites now classed as exceptionally low.

As the government pushes to accelerate housing delivery, water availability is emerging as a growing challenge, particularly in areas where demand for new homes is increasing alongside pressure on already stretched water supplies.

Carly Thorpe, Construction & Engineering Partner at Walker Morris, said: “The latest drought data highlights an issue that extends beyond the environment and into the future delivery of housing and infrastructure. Construction projects rely heavily on water throughout the build process, from concrete mixing and dust suppression to equipment cleaning and staff welfare facilities. Where water supplies are constrained, contractors may face increased costs through alternative sourcing, transport arrangements or investment in water-saving technologies.

“There is also the potential for wider supply chain pressures. Many construction materials require significant volumes of water during manufacturing, meaning prolonged shortages could contribute to cost inflation, bottlenecks and delays to project delivery. In the longer term, the biggest impact may be felt at the planning stage of housing and commercial schemes. Developers may need to demonstrate how new projects are water efficient, without placing further pressure on local infrastructure.”

She added: “While water shortages alone aren’t likely to cause insolvency, they add a layer of financial pressure for contractors who are already struggling with low margins, delayed payments, labour shortages, and material inflation. At the same time, it presents opportunities for businesses to deliver infrastructure needed to improve water supply. Those that adapt early by improving water management and incorporating water-saving technologies into projects will be best placed to navigate the challenges ahead.”