Will UK residential construction activity continue in 2018?
Data shows that UK housebuilding activity has been pretty good during 2017. But, due to the chronic lack of housing the country over, much more residential construction is still needed.
While Brexit remains a big fly in the ointment, Government support for the UK’s construction sector is already confirmed for 2018. But, will it be enough to keep this momentum going and help the UK achieve another solid year of home building?
“With so much talk over how the UK has built too few homes for too long, it’s positive to hear that house building has risen during 2017,” said Knightsbridge estate agent, Plaza Estates. “However, it’s crucial that this momentum continues into 2018.”
2017 so far
Government data shows that in the financial year ended March 2017, 147,930 new homes were completed in England. That’s up from 139,670 in the previous financial year and the highest amount of newly built homes in England, since the financial year ended March 2008.
Meanwhile, data from the National House-Building Council, (NHBC) the body that issues warranties for newly built homes, reports that house building across the UK has been stronger in 2017 than a year earlier.
Its data shows 13,583 new homes were registered to be built in October, compared with 12,143 in October 2016. And, in the three months to October, there were 39,752 new homes registered to be built, with the NHBC, up from 37,552 a year earlier.
By region, south east England experienced the biggest number of new home registrations, 7,438 in the three months to October. That was followed by north west England and east England with 4,769 and 4,426, respectively.
Of course, NHBC data only represent registrations to build a new home and not the finished article. Nevertheless, it’s a promising start and suggests 2017’s total could surpass that of 2016 when official data are collected.
“House building in the UK really has kicked up a step during 2017 and demand remains strong for the finished article, from buyers, investors and renters,” said Proskips. “Surely it’s more difficult to lose that momentum than maintain it as we enter 2018.”
Support for smaller builders
While many of the completed homes in 2017 are down to the bigger, well-known construction firms, the smaller, SME builders have also been hard at work. Indeed, the Government appears to have recognised their importance in the house building industry, with its additional financial support for them., announced in November by Chancellor Philip Hammond.
It may be welcome, but it on its own, it simply isn’t enough to keep builders busy. However, a recent survey from the Royal Institution of Chartered Surveyors suggests there is still enough appetite to support new orders growth of residential construction.
According to the RICS, finance isn’t holding projects back, but a lack of skilled workers is. Therefore, it’s essential the Government and private sector work together to improve the provision of the relevant training along with governance and recognition of qualified and properly trained construction professionals. That goes for all sib-sectors in the industry, including residential related skills.
“The UK Chancellor and other member of parliament do seem to be saying the right things with regards to house building and training, however, talk and action are two very different things,” said M&M Property. “It remains to be seen how successful the existing plans and initiatives will prove to be. But, hopefully, the construction industry skill shortage will begin to lessen in the coming years.”