House building still sluggish
9th July 2019

New house building starts fell 9% in Q1 over the previous quarter and the same amount over same period last year, according to Housing Ministry figures published this week.

The news is echoed by a separate report by Barbour ABI and Construction Products Association showing that the decrease in home building contracts in some areas of the UK outweighed signs of growth in others.

The figures from the Ministry of Housing, Communities and Local Government also show only a slight increase of 1% in the annual growth of dwelling starts to 162,270, a longer-term figure casting further doubt on the Government’s much-vaunted aim to be seeing 300,000 new homes a year by the mid 2020s.

The Barbour/CPA report reveals that out of 12 regions of Britain, only London, East Midlands and Wales showed increases in home building contracts.

Rebebecca Larkin, Senior Economist at the CPA, said: “A cooling in house price growth has formed residential coldspots across the country and despite the government’s demand side stimulus and ambitious supply side goals, a slowdown in activity in a market dominated by private sector house builders may not be avoided. In addition, Brexit-related uncertainty means investors are still wary of committing to large upfront outlays. Illustrating this, construction on Spire London, the largest residential contract award in 2018 by some way, has been paused for review given the significant weakening in prevailing market conditions, particularly for high-end property in the capital.”