New housebuilding hits nine-year high amid slowing construction sector

The number of new build homes that have started to be built has surged to the highest level since 2008, according to new government figures.

The latest housebuilding data shows that 164,960 new homes were started in the year to June 2017, up 13 per cent on the previous year, and have increased by more than three-quarters since the low in 2009.

More than 153,000 new homes have been completed during the same period, showing an increase of 11 per cent compared with the year before.

Housing and Planning Minister Alok Sharma says: “Building more homes is an absolute priority for this government. Today’s figures are proof that we are getting Britain building again, with new housing starts reaching record levels since 2009. It’s vital we maintain this momentum to deliver more quality homes in the places that people want to live. Our housing white paper set out an ambitious package of long-term reforms to do just that.”

The white paper, though, is still yet to be implemented, as some caution that tough times may be on the horizon, as costs climb and the UK prepares to exit the Europen Union.

Growth prospects for the construction industry overall have been downgraded for 2018, according to the latest forecasts by the Construction Products Association (CPA). Output is expected to soften as a slowing economy, falling real wages and rising costs adversely affect the industry. Growth for 2018 is therefore only expected to rise by 0.7 per cent, the slowest in six years, and a downward revision from 1.2 per cent in previous forecasts.

Private housebuilding and an increase in infrastructure activity, though, are the bright spots driving growth in the coming years, helping to offset a sharp fall in the commercial and industrial sectors.

Figures from the ONS show construction activity shrank by 0.1 per cent from May to June 2017, while Barbour ABI contract award values slowed at the start of the third quarter, with a 26.2 per cent decrease in contracts. Private housing activity, though, rose 5.1 per cent from May to June and 9.4 per cent in the year to June.

The housebuilding sector is still reliant on Help to Buy equity loans to drive housebuilding numbers. The policy is in place until 2021, which is expected to support demand for new build and drive growth in private housing starts of 3 per cent in 2017 and 2 per cent in 2018. However, this is slower than in previous years given uncertainties over the strength of consumer confidence and falls in real earnings.

Noble Francis, Economics Director at the Construction Products Association, comments: “Construction firms are still reporting that activity remains high and there are still lots of cranes around. But there are clear signs that construction output is slowing and that next year, in particular, will be difficult for the industry.

“Despite the slowdown in the general housing market, particularly in London, house builders continue to increase supply, albeit more slowly than in recent years. Currently, more than a third of new house building is being sustained by the government’s Help to Buy and should continue to do so over the next 18 months if the wider economy and housing market don’t slow further. However, if economic conditions do deteriorate further, house builders can react quite quickly if necessary.”

 

Workload and confidence both on the up, say UK builders

15th May 2017

Workload and confidence are both climbing in the UK’s construction industry, according to builders.

The Federation of Master Builders’ Q1 2017 survey says that 2017 is off to a positive start for the UK’s construction SMEs, with increasing workloads in every
devolved nation and English region, with “particularly strong results in Wales, Scotland and Northern Ireland”.

This is despite the looming Brexit negotiatinos and the impending General Election, which the FMB argues shows a “resilience in our sector that can sometimes go underappreciated”.

However, these encouraging findings are dampened somewhat by continuing price inflation, with material and wage increases being widely reported. Indeed, 85 per cent of builders believe that material prices will rise in the next three months, while 60 per cent of construction SMEs are struggling to hire bricklayers, 58 per cent are struggling to hire carpenters and joiners, and 45 per cent are struggling to hire plumbers.

Nonetheless, the mood is surprising upbeat. Scottish construction SMEs reported the highest levels of growth since the financial crisis unfolded in Q4 2007, while one in two construction SMEs predict rising workloads in the coming months, with just 5 per cent predicting a decrease in activity

The mood is something of a contrast to official figures from the Office for National Statistics, which reports that output in the construction industry grew quarter-on-quarter for the fifth consecutive period, rising by 0.2 per cent in the first three months of 2017, but has falling for the third consecutive period month-on-month, decreasing by 0.7 per cent in March 2017. Within those figures, though, new housing experienced strong growth in March, increasing month-on-month by 3.8 per cent, and month-on-year by 5.4 per cent.

Repair and maintenance provided the main downward pressure on construction output, shrinking both month-on-month and quarter-on-quarter by 1.8 per cent and 0.2 per cent respectively.

The net balance for the private new housing sector declined by 4 percentage points to +11, according to the FMB survey. Despite this, it remained in positive territory for the fifth consecutive quarter. The proportion of firms reporting a rise in workloads fell, to 25 per cent from 30 per cent last quarter, while over half of respondents (62 per cent) experienced no change in workloads.

“The remainder of the year will undoubtedly provide its challenges, but in the short term at least, builders are confident about their prospects,” concludes the report.
 

UK planning permissions on the up

21st April 2017

Permission for 293,127 new homes were granted in 2016, according to the Home Builders Federation.

The figure marks the highest yearly total since the HBF Housing Pipeline survey began in 2006 and a strong indicator that increases in house building are set to continue; the number of permissions granted tends to be reflected in the number of homes being completed around three to four years later – a delay indicating the time taken to navigate the planning system from an initial, outline planning permission to the point where actual building work can start.

The industry welcomes the fact that Local Authorities are continuing to increase the number of permissions they are granting but there is concern that the number of sites permissioned is falling by 11 per cent compared with 2015 (from 19,600 in 2015 to 17,500 in 2016) indicating permissions are being granted on larger ‘strategic’ sites. Whilst the headline number of plots permissioned now exceeds the pre-crash peak by around 15 per cent, the number of sites on which those homes could eventually be built is down by more than 10% on the same time period.

“Because of the infrastructure requirements on larger sites, these permissions tend to take longer to start being delivered,” says the HBF’s report. “It is also key that Local Authorities are realistic about the rate at which large sites can deliver and don’t expect one large site to address their housing requirements. As per the Government’s Housing White Paper, local authorities need to work with developers to determine accurate build out rates so they can accurately predict the number of homes are being delivered on a site- and thus overall housing delivery in their area.”

“Whilst housing supply is up 52 per cent in the past three years we are still not delivering enough homes to adequately cater for our population and the planning system remains one of the major constraints on supply,” concludes the report.

 

UK construction confident in face of slowdown

7th April 2017

The UK construction sector received disappointing results for March 2017, as residential building growth slowed, but the industry remains upbeat about performance in the future.

The latest Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) posted at 52.2 in March 2017, dropping from February’s 52.5. This represents one of the slowest levels of growth in construction output since August 2016, before the significant period of growth we have seen for the last six months began.

“Like other areas of UK industry, the pace of growth in the construction sector has slowed, but it is refreshing to see that industry confidence remains strong when considering long-term business prospects,” comments David Johnson, Director at currency specialists, Halo Financial.

The latest figures reflect only a small increase in new residential building, which has had knock-on effects on jobs growth and led to weaker input buying.

Balancing the residential slowdown, the last month shows a significant increase in civil engineering activity, the fastest growth in 2017 to date, as well as an upturn in commercial construction activity.

Nonetheless, construction companies surveyed said they were less concerned about Brexit – and this has improved new business in the form of new invitations to tender. This has increased overall business confidence and points to a positive outlook for growth in the sector. Around half of companies anticipate business growth throughout 2017, with only 9 per cent expecting growth to slow in their business.

“It is reassuring to see that construction companies are less worried about the effects of Brexit and are focused on longer-term planning to support growth and profitability. This is reinforcing the reason for Sterling’s strength in the face of what could be a very uncertain time,” adds Johnson.

 

Growth in UK residential construction forecast to continue

27th March 2017

The UK residential housing market is “well placed” for construction of homes to continue growing over the coming months, according Barbour ABI.

The firm’s latest Economic & Construction Market Report shows that the value of construction contracts in all sectors increased in February, but the number of projects declined. While construction output fell 0.4 per cent in January 2017, according to the most recent figures from the ONS, though, private housing saw output rise 7.4 per cent year-on-year in January.

In February, Barbour’s data saws that residential units and values “significantly
increased” compared to February 2016. Indeed, while activity in the residential sector was largely flat in February with a 0.1 per cent increase in contract value, this figure is 46.1 per cent higher than a year ago. The number of units associated with residential contracts awarded decreasedby 1.8 per cent between January and February, based on a three month rolling average, but increased by 15 per cebt year-on-year.

“There is no reason at this stage to doubt the continued momentum within the largest sector in construction,” says Barbour’s report. “Given that the long term fundamentals that have been driving growth, in particular help for first time buyers, are set to continue as Barbour ABI remain confident that this sector will continue to grow”.

All the house indices highlight a trend for softening property price growth in recent months, with most firms forecasting a moderate growth of around 2 per cent over 2017. Market conditions for house builders remain strong, however, with Taylor Wimpey recently reporting a 21.5 per cent increase in full year profits.

London was the main location of activity in the residential sector this month, accounting for 20.8 per cent of the value of contracts awarded, a decrease from the 26.9 per cent that it accounted for in February 2016. The South East was the second most prominent location for residential construction contracts in February, with 15.7 per cent, up slightly year-on-year.

The type of projects awarded in the residential sector was dominated by private housing, accounting for 78 per cent of the month’s contracts by value. The next largest project type were hostels/halls of residence, making up 11 per cent.

There were £5 billion worth of contracts that are nearing award status suggesting this month’s growth is likely to continue over the next few months, concludes the report: “Looking at the value of contracts at an advanced planning stage shows that the residential sector is well placed to continue its growth in the coming months.”

 

England needs 174,000 new homes every year

23rd January 2017

England needs 174,000 new homes every year in order to keep up with demand, new research reveals.

The country’s housing shortage has been a problem for the real estate industry for many years, as the population continues to grow, pushing up demand and, as a result, underpinning house price growth for some time to come. Now, new figures from the National Audit Office underscore just how big the accommodation shortfall is. The NAO’s analysis of the government’s housing strategy and policy reinforce that the need for housing in England has in recent years grown faster than its supply.

Total estimated government spending on housing in England was approximately £28 billion in 2015-16. The most significant element of this is housing benefit. In 2015-16 there were 4.1 million claimants in England, costing around £20.9 billion. Two of the Department’s four strategic objectives for this Parliament are focused on housing: increasing home ownership, and increasing the supply of homes, with an ambition of delivering a million new homes in England by 2020.

Delivery of the government’s million new homes ambition by 2020, notes the NAO, will require 174,000 net additions each year, says the research. However, the target may not be that far out of reach: projections by the NAO suggest there will be at least 227,000 new households formed each year between 2011 and 2021. This is substantially higher than the annual average of 166,000 extra homes in England over the last 10 years. This is not only newly-built homes, but also includes converted properties, although the NAO highlights that the government is reliant upon the market to achieve its objectives, something that could be impacted by the upcoming Brexit negotiations. Nonetheless, despite early indications of a slowdown immediately after the referendum result, more recent evidence points to modest increases in numbers of sales being agreed in England.

 

Building industry calls for UK government to unblock planning system

4th January 2017

The UK’s building industry is calling for the government unblock the country’s planning system to speed up the construction of new homes.

The number of planning permissions granted for new homes remained high in Q3 of 2016, according to the latest Housing Pipline report from Glenigan and the Home Builders Federation. Permissions for 76,242 homes were granted in England between July and September, with the total number for the 12 months to September reaching 289,011, the highest since the survey began in 2006. However, the number of actual sites these permissions were on dropped, which the HBF argues indicates Local Authorities are granting permission for an increasing number of large strategic sites as opposed to the mix of size and type of site needed to deliver more homes.

Whilst housing supply is up 52 per cent in the past three years, we are still not delivering enough homes to adequately cater for our population and the planning system remains one of the major constraints on supply, says Stewart Baseley, Executive Chairman of the HBF.

“The house building industry is committed to building more homes but can only do so if it has the land on which to build them. It is encouraging that so many headline planning permissions are being granted but we simply have to find a way to unblock the system and reduce the time it takes to get a permission to the stage where builders can actually start building,” Baseley comments.

Indeed, permissions are recorded once one of the ‘conditions’ attached to them by the Local Authority is satisfied – or ‘discharged’. Many will have dozens of ‘pre commencement’ conditions attached and so builders will not legally be entitled to commence construction until they are all discharged – a process that can take some months.

Many conditions are things that could be agreed upon at a later stage in construction, such as the Local Authority needing to approve a final children’s play area design, cautions the HBF. Information collected by HBF shows authorities are holding up construction with demands for scale drawings of the placement of picnic tables and refuse bins in children’s play areas and detailed statements on the ‘engagement and recruitment of local artists’ to provide public art on the new estate.

“Construction work shouldn’t be held up by council officers getting round to approving designs for landscaping, playgrounds or ensuring developers are liaising with community artists,” adds Baseley. “These could be agreed whilst infrastructure work gets started. Our housing crisis is too serious a threat to our future for everyone not to be pulling in the same direction.”

 

UK development sector bullish on Brexit impact

21st November 2016

The UK’s development sector appears bullish on the impact of Brexit upon the building industry.

A new survey by Knight Frank found that residential development finance lenders have a positive outlook for the coming year. Activity levels in central London have fallen over the last 12 months, according to the poll of over 45 key operators in the sector, as lending activity moves towards outer London and is forecast to rise in the Midlands and the North of England. But two-thirds of respondents nonetheless said that they had seen an increase in business in three months following June’s EU referendum, while 16 per cent saw a fall.

A similar majority (68 per cent) said they expected business to climb in the coming year, with a third believing they will see “a sharp rise” in activity.

However, more than 25 per cent said they believed that loan-to-value to GDV will fall, suggesting lenders will look to lower their risk.

Nonetheless, the survey adds to positive figures from the government, which indicate that the mood in the residential construction is broadly upbeat.

 

House building “moving in the right direction”

15th November

Property construction in the UK is moving in the right direction, say builders, although more work still needs to be done.

The latest figures from the Department of Communities and Local Government show that annual housing supply in England amounted to 189,650 net additional dwellings in 2015-16, up 11 per cent on the previous year, with 163,940 new homes being built.

The net additional total is the highest number recorded since 2007-08, when 223,530 were recorded, a positive sign that activity is improving.

Brian Berry, Chief Executive of the Federal Master Builders, welcomes the news as “positive progress” towards solving the housing crisis.

“However, the total created still falls below the number needed each year to deliver the Government’s stated aim of building one million new homes by 2020,” he adds. “The current figures also show a strong reliance on the conversion of existing buildings to residential use, which is a trend that can’t be sustained indefinitely. Recent Government policies to boost house building are helping, but there is still plenty of room for more radical solutions to meet the one million target.”

“The Government needs to turbo-charge the SME house building sector,” he concludes. “Smaller firms, once the main drivers of house building in this country, have become only marginal players in the market, which has hampered the capacity of the industry.

“We’re hopeful that the Government will listen to the voice of SME builders in its forthcoming Housing White Paper and put measures to enable more small scale development at the heart of the country’s house building strategy.”

“We know there is more to do to ensure the housing market works for everyone and not just the privileged few and we will be setting our further details in our housing white paper shortly,” comments Housing Minister Gavin Barwell.

The government recently announced a £3 billion Home Building Fund which will help build more than 25,000 new homes this Parliament and up to 225,000 in the longer term. An additional £2 billion is also being made available to help speed up delivery of homes on surplus public sector land.

 

Allow councils to borrow to build new homes, FMB tells Chancellor

9th November 2016

With the UK’s Autumn Statement looming, the building industry has called for the Chancellor to allow local councils to borrow money to build much-needed homes.

Allowing local authorities to do so could both help tackle the housing crisis and mitigate any emerging economic uncertainty, says the Federation of Master Builders (FMB).

“We simply aren’t building enough new homes to meet current demand, which is why we’re calling for the Chancellor to empower local authorities to borrow money to build thousands of new social homes,” says Brian Berry, Chief Executive of the FMB.

Berry says the Autumn statement is an opportunity for the new Chancellor to “think creatively” about how to tackle the UK’s housing crisis.

“The Government clearly recognises the extent of the housing crisis we face and has signalled its willingness to bring forward a wide-ranging package of measures to tackle this, many of which we expect to see in a forthcoming White Paper,” ads Berry. “Nevertheless, the gap between the number of homes we are building and the 250,000 a year figure widely accepted to be necessary in order to address the housing shortfall remains significant. Local authorities, who are well placed to identify local housing needs, can play a critical role in financing an increase in housing output in a safe and sensible way. We currently spend £1 on house building for roughly every £4 spent on housing benefit. Investing in a longer term solution would therefore make sense even in more certain economic conditions.”

 

UK housebuilders optimistic over sector future

31st October 2016

UK housebuilders are optimistic about the sector’s future in the wake of the EU referendum, despite an ongoing skills shortage.

According to the second annual Lloyds Bank Commercial Banking report, housebuilders are forecasting increased growth and investment in the sector in th ecoming years. The report is the first in-depth study of the sector following the decision to leave the European Union in June 2016. Although over a third of firms (36 per cent) said that the uncertainty following the EU referendum result is the biggest challenge to their business, the industry is upbeat. Average five-year investment plans, for example, are up 17 per cent year on year.

Pete Flockhart, Head of Housebuilders, Commercial Banking, Lloyds Bank, said: “Given the challenges that housebuilders face, the sector is painting a relatively optimistic picture, with improved growth and investment forecasts compared with last year’s survey.”

The challenges that the sector highlighted include the rising cost of materials and the current planning system. Firms also said that the availability of government support and suitable land are factors that impact the industry’s ability to meet targets for new housing.

The biggest concern, though, is that there are not enough skilled workers in the industry, with bricklayers, electricians, plumbers and joiners being the hardest to recruit.

Recruitment and skills therefore remain a focus, with three of the top priorities for firms over the next five years being recruiting additional staff (52 per cent), and investing in training (49 per cent) and apprenticeships (32 per cent). A quarter (25 per cent) of firms are still planning to create jobs to support growth. This is down from 31 per cent last year, but the sector still looks set to create more than 70,000 jobs over the next five years.

Stewart Baseley, Home Builders Federation, says: “The industry is pushing the skills agenda hard. If we are to build more high quality homes we simply have to increase industry capacity. We are looking at how we build our individual sites more quickly; and the measures Government could introduce to allow SME builders to play their part in delivering more homes.”

 

Demand for work bucks Brexit, say UK builders

19th October 2016

Demand for work is bucking any Brexit concerns, say UK builders, as overall workloads remained steady in the three months following the EU referendum.

The State of Trade Survey, conducted by the Federation of Master Builders, is the only UK-wide assessment of the SME construction sector and is the first to cover the quarter since the vote to leave the European Union.

Employment rose at a faster pace compared with three months earlier, according to the report, with output prices, material costs, wages and salaries all projected to increase over the next six months.

59 per cent of SME construction firms struggled to hire bricklayers and 55 per cent found it difficult to hire carpenters and joiners. However, the sector is optimism, with business forecasting rising activity in the coming three months, albeit at a slower rate compared with the last three months.

Brian Berry, Chief Executive of the FMB, comments: “Ongoing workloads for construction SMEs remained remarkably resilient in the months following the referendum vote, suggesting that consumer demand – which accounts for the bulk of SME work – has held up far better than anticipated. Some of the other key indicators of SME activity, such as employment levels, anticipated workloads and new work enquiries, are all positive, albeit showing slowed growth compared to the previous quarter.”

“If we all agree that construction is a “weather vane” industry, and demand for home improvement and new build homes an important gauge of consumer confidence, then our results chime with the cautious positivity demonstrated across construction and the wider housing market,” he adds.

Berry notes that the employment struggles of some SME firms highlights “a different potential consequence of Brexit”: the possibility that the UK will have a less flexible workforce.

“12 per cent of construction workers working in the UK are of non-UK origin, forming a vital part of a labour force that is already stretched. Given that the skills gap is only expected to grow over the next decade, it’s vital that talented tradespeople continue to come to the UK,” he comments. “For this reason, we welcome the Government’s u-turn on requiring companies to publish data on the percentage of foreign workers they employ. Such a move would send completely the wrong message to foreign workers currently living and working in the UK and those who might consider coming here.”

 

UK property industry welcomes £3bn fund for smaller builders

3rd October 2016

The UK property industry has welcomed the government’s announcement of a new £3bn fund for smaller builders.

Speaking at the Conservative Party Conference, Chancellor Philip Hammond said that he will prioritise new homes and transport over cutting the deficit, scrapping former Chancellor George Osborne’s plan to balance the books by 2020.

As part of that effort, Communities Secretary Sajid Javid announced a new £3bn “home builders’ fund”, with a specific aim to use the money to support smaller buidlers.

The fund has been welcomed by the Federation of Master Builders.

Brian Berry, Chief Executive of the FMB, says: “We welcome the Government’s renewed focus on house building and its recognition that without a resurgent SME sector, there’s little prospect of the country tackling its chronic under-supply of new homes. The launch of a £3 billion Home Builders Fund, a significant part of which will be specifically targeted at supporting small scale developers, will tackle one of the key barriers to SME house builders – a lack of access to finance.”

Indeed, the FMB’s recently published annual House Builders’ Survey found that a lack of available land and finance are the biggest barriers to SMEs increasing their output of new homes.

While a high proportion of SMEs believe that consumer demand for new homes remains resilient, even in the wake of Brexit, two-thirds of SME house builders cited a “lack of available and viable land” as the biggest barrier to increasing numbers, while half said the planning system and difficulties accessing finance were other serious challenges.

“This problem is particularly pronounced for the smallest firms and new entrants. It’s therefore critical that the new fund is made accessible to firms that will not want to engage with lengthy bureaucratic processes,” Berry adds. “Some Government funding schemes have been previously available to smaller developers, but received relatively poor take up due to the perceived complexity of applying, and the challenging timescales for delivery and repayment… If the Government get the details of this fund right, we would hope that the anticipated building of 25,500 homes over the course of this Parliament could act as a real catalyst for a much wider revival of SME house builders.”

Campbell Robb, chief executive of housing charity Shelter, adds: “The increased funding going to smaller builders announced today is welcome, and correctly acknowledges that a few major developers cannot build all the homes we need by themselves. We hope this is a precursor to an ambitious home building programme in the autumn spending review.”

Javid also announced “unprecedented” plans to “open up the market”, with the government borrowing £2bn to support an “Accelerated Construction” scheme, which will help to speed up houses built on publicly-owned brownfield land, with the aim of building up to 15,000 homes by 2021.

He also higlighted “nimbyism” as part of the obstacle to construction, saying that while everyone agrees on the need for new homes, “too many” oppose them in their own communit.

The government will announce further policy proposals in a housing white paper that will be released by the end of the year.

 

“Flawed” figures not showing true progress, say UK builders

20th September

“Flawed” figures from the government are not showing the true progress being made by the UK construction sector, builders have declared.

The official data from the Department of Communities and Local Government, which is published on a quarterly basis, “excludes around a fifth of all new build completions every year”, warn the Home Builders Federation, which says that around 30,000 new builds are not counted in the numbers.

As a result, the HBF says the DCLG underreport new build completions in 75 per cent of Local Authorities with an average of 153 new homes lost in each of those areas.

More than half of new build homes in areas such as Birmingham, Liverpool, Leicester, Salford and many London Boroughs are completely unaccounted for in the quarterly series, claims the report.

Instead, it highlights the “Net Supply of Housing” data, which is published once a year, as a more reliable souce of statistics. The latest report shos that more than 181,000 homes were added to the country’s housing stock in 2014/15, of which 155,000 were new build, up 20 per cent year-on-year.

“Housebuilding has increased significantly in recent years but the continual publication and use of inaccurate statistics is painting a negative picture that is undermining the progress being made in tackling the housing shortage,” says Stewart Baseley, executive chairman of the Home Builders Federation. “The Government’s housing policies and the industry are delivering, and it is incredibly frustrating that official statistics are not reflecting what is happening on the ground but instead presenting an open goal for critics.”

 

Planning consents still falling short, suggest UK figures

19th September 2016

New UK figures suggest that planning consents granted are still falling short of the government’s targets for new homes.

The latest DCLG data shows that between April and June 2016, district level planning authorities in England received 132,000 applications for planning permission, up 7 per cent on the corresponding quarter of 2015. Authorities granted 100,900 decisions, up 6 per cent from the same quarter in 2015, but equivalent to 88 per cent of decisions, unchanged from the same quarter of 2015.

Some are concerned that planning approval numbers are not rising at fast enough pace, though, to meet demand. Indeed, local planning authorities granted 22,000 fewer applications in Q2 2016 compared to Q2 2006.

Andrew Bridges, Managing Director of Stirling Ackroyd, comments: “These figures show the Government is failing to put its money where its mouth is when it comes to housing. The sluggish growth in the approval of residential applications will not be enough to enable a million new homes to be built by 2020. Local authorities are still granting fewer applications than a decade ago, despite the Government’s highly publicised housebuilding agenda. While councils are granting 88 per cent of all decisions, it’s concerning this proportion varies wildly in different local planning authorities. Given the serve shortage of homes across the UK, we can’t afford for some councils to only grant a quarter of applications for major developments.”

“Additional help to unblock stalled sites and incentives to build-out existing permissions will enable housebuilders to step up supply,” he adds. “We can’t afford to allow this pre-Brexit stagnation in the creation of new homes to continue if we want to stop house prices from spiralling out of control.”

 

UK construction stays steady post-referendum

9th September 2016

UK construction has stayed flat after the EU referendum, according to new official figures from the Office for National Statistics.

The ONS data shows that output in the construction industry was flat at 0.0 per cent growth in July 2016, compared to June 2016. Compared with July 2015, construction output decreased by 1.5 per cent.

However, residential construction is displaying more positive signs: while output in total new housing fell 0.8 per cent in July 2016 compared with June 2016, compared to July 2015, total new housing output reported an increase in growth of 5.6 per cent. New housing orders also rose at their fastest rate since 2010 over the three months to June 2016, with overall new constructino orders jumping 8.6 per cent in the year’s second quarter.

The results are being welcomed by the industry as better than expected, which remains upbeat.

Andrew Bridges, managing director of Stirling Ackroyd, comments: “We’re not out of the woods yet. Despite the positive consumer data we’ve seen in the weeks and months since Brexit, it’s clear that construction output and housebuilding is flat-lining. The Bank of England’s decision to halve interest rates has helped to balance the ship in the very short term, but it is still too early to say what the longer-term impact of June’s referendum will be on housebuilders, the property market and the wider economy.

“We must not allow Brexit to distract from the urgent need to build more homes, especially in London and the South East, which are both facing an intense housing shortage. The Chancellor’s Autumn Statement must give housebuilders the confidence to get on with tackling this fundamental issue in our society and extend opportunities for first time buyers, such as Help to Buy. As a former property developer, the industry will be expecting Phillip Hammond to step up to the plate and back housebuilders.”

 

Housebuilding: New figures show England is falling short

26th August 2016

New figures released by the government show that England is falling short of its target, warns Shelter, as the housing charity calls for support for SME builders.

Annual housing starts totalled 143,880 in 2015, up by 7 per cent per cent compared with the year before. 34,920 homes were built in the second quarter of 2016, meanwhile, up 2 per cent from the previous quarter.

However, the figures mark a decrease of 2 per cent compared to the same quarter in the previous year, leaving the country falling short of the 250,000 needed to address England’s housing shortage and 28 per cent below their March quarter 2007 peak.

Shelter is now calling on the government to commit to long-term reform of house building, cautioning that post-referendum uncertainty could cause construction of new homes to fall 8 per cent in the next year.

The charity’s report highlights a number of other key measures to help the market recover, including the government directly commissioning housebuilding by small and medium sized firms, supporting the private sector in building more affordable homes, which can then be sold on local housing associations. Other proposed measures include promoting land market transparency, to make it easier for smaller house-building firms to find and access suitable plots, and gving local communities the powers to force land-owners to make space available for new homes where there is an identified local need.

Roger Harding, Director of Communications, Policy and Campaigns at Shelter, says: “As a country we’re still falling far short of building the number of homes we need. Shelter’s own recent research shows that, without significant reform to the housebuilding market, the government is projected to miss its target of a million homes by 2020 by over a quarter.

“Theresa May now has a real chance to turn things around and return hope to all those being left behind by our housing shortage, but only through committing to measures that can reform house-building for the long term. This includes using record-low interest rates to invest in a new generation of genuinely affordable homes to rent and buy, and helping our struggling small builders access the land and finance they need to build.”

Sarah McMonagle, Director of External Affairs at the FMB, adds: “Even prior to the referendum vote, the government faced an uphill struggle to meet its own target of building one million homes by the end of this Parliament. The number of annual completions have risen steadily over the past couple of years, but not sufficiently to suggest that there’s any margin for error when it comes to the Government’s attempt to increase output. It’s still too early to tell what effect the decision to Brexit will have but it stands to reason that any wobbles in the house building industry will inevitably have a profound effect on our ability to hit that target. It’s therefore essential that the Government is aware of the risks and does everything in its power to mitigate those risks.”

McMonagle continues: “While we’ve been encouraged by the suggestion from the new PM that she will continue to prioritise housing, we need more than just words – we need bold new policy interventions. As Shelter’s report identifies, there’s a compelling case for turbo-charging the SME house building sector, which policy makers have started to recognise is key to reaching the levels of house building that we need.”

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