Value of work in new housing at record high

While construction output fell for the third consecutive month, it remains at a record high with declines offset by a surge in private housebuilding, according the latest ONS (Office for National Statistics) data.

The ONS’ monthly construction series has now decreased for the third consecutive month. However, that output remains at a historically high level. In addition, the month-on-month growth rate for May 2017 has been revised upwards by 0.8 percentage points, from negative 1.2% to negative 0.4%, from the previous construction output publication due to the receipt of new data.

The majority of the declines in the other construction sectors were offset by the large rise in private housing, which grew at its fastest rate since December 2015; resulting in a real value increase of £118 million.

Total all work decreased to a value of £11,507 million in June 2017. Despite this fall, new housing has remained strong, reaching its highest level on record in June 2017. The increase in new housing was driven by a rise in private housing, to £2,432 million.

Despite enduring both month-on-month and 3 month on 3 month falls, construction output remains at a high level, with 0.9% month-on-year growth. This 0.9% increase has been driven by a 2.5% increase in new work, which stems from a 9.4% month-on-year increase in new private housing.

Neil Knight, business development director at Spicerhaart Part Exchange and Assisted Move, said, “Government initiatives relaxing planning regulations, finally appear to be filtering through with private housing new build figures higher than at any point in the past 15 years – both for the last quarter and for June. There is still much more to be done but it is refreshing to see the numbers heading in the right direction.

“There is also a growing interest in newly built homes. There is not enough existing stock coming to the market, so even people who wouldn’t normally consider new homes now are. As a result, part exchange of existing homes is being much more prominent, not only for second steppers but increasingly for people wanting to downsize too.

“As the demand for new build increases, I expect it in turn to encourage developers to build more new homes as they feel reassured that they will be able to sell them and for the price they need.”

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