New Build Construction Starts Fall For Three Consecutive Quarters
New build starts in England have fallen for the fifth out of six quarters and the third consecutive quarter as the construction sector remains concerned by political uncertainty.
The 37,220 building starts in the second quarter of 2019 represented a 2% decrease on the opening quarter’s construction output.
Furthermore, new build starts are down 8% on the figures released a year earlier. Housing Association and social housing starts declined by 4% whilst private enterprise tenure fell by 2%.
Whilst developers appear reluctant to start anything new, completions have increased marginally in the second quarter of the year.
The 45,190 completions in England represented a 4% rise from the previous quarter and 11% higher than the second quarter of 2018.
Social housing and Housing Association completions skyrocketed by 20% with private developments rising by 2% in the quarter.
The 160,640 new build dwelling starts in the year to June highlighted a marginal decrease of 1% when compared with 2018. Similarly, the 173,660 completed dwellings in the year to June 2019 was an 8% increase compared to June 2018.
Michael Stone, Founder and CEO of Stone Real Estate, said:
“On the surface, these latest numbers are extremely encouraging and tell a positive story in so far as overall new homes supply with house builders delivering on 11% more than a year ago. This is no mean feat given current political headwinds and economic uncertainty and is surely testimony to our teflon-like aspirations as a property owning nation.
“In particular, affordable homes have seen a big spike in completions and this has to be warmly welcomed given that this is where the biggest deficit in housing provision lies.
“However, celebrations at solving the bottle-neck of housing supply will be short-lived if the downturn in ‘starts’ is not reversed in the next set of numbers. These latest MHCLG numbers point to a reduction in dwellings started of 2% quarterly and 8% year on year. This is no seasonal blip and our house-builder friends and local authorities alike will need to work hard to dig-down, literally, in order to ensure that the positive trend in housing supply continues to come close to meeting demand”.
Brian Berry, Chief Executive of the Federation of Master Builders, said:
“The construction industry accounts for seven per cent of the UK’s GDP and over three million jobs. Today’s figures, which show the second-sharpest fall in output since 2009 and staffing levels since 2010, should be a concern for us all. With ambitious infrastructure and house building targets, the Government can’t afford to lose any more capacity in this industry”
“The PMI data picks up on material shortages and bottlenecks already, even before leaving the EU, and this is likely to be a major concern in the event of a no-deal. I urge the Government to work with the industry to ensure that key construction products, critical to the building work this country needs, such as timber, are not held up at ports across the country in a no-deal scenario.
“It is encouraging to see the industry is more optimistic for the next 12 months and I hope that if the Government is able to secure a good exit deal with the EU, then client confidence will rebound, and the industry will start growing again.”
How concerning are these figures to the conveyancing sector? Will confidence return to the construction sector once a Brexit outcome is announced?