Growth in Private housebuilding in the UK slowed at the start of 2016, according to Royal Institution of Chartered Surveyors.
Growth in Private Housebuilding in the UK slowed at the start of 2016, according to Royal Institution of Chartered Surveyors.
Despite the Government promising to deliver 200,000 new homes by 2020, the latest RICS UK Construction Market Survey revealed that growth in the Private Housing sector slowed down “considerably” during the first quarter of 2016.
Private Housing workloads rose at their slowest pace since Q2 2013, with only 36 per Cent more of those working in the sector reported a rise in growth rather than a fall over the first quarter of 2016. During the first quarter of 2015 that figure was close to 50 per cent.
Simon Rubinsohn, RICS Chief Economist, comments: “On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘We Are The Builders’ speech, given the Government’s significant commitment to this sector. One might well ask why growth in private housing workloads is softening at a time when policy is firmly focussed on the creation of new starter homes. We have long held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.”
The figures arrive as the NHBC also reveals its own report, which shows that new home registrations dipped 9 per cent year-on-year in Q1 2016.
A total of 36,566 new homes were registered by NHBC, with 28,398 new homes registered in the private sector, a 7 per cent decrease on the 30,560 a year ago.
However, for the financial year 2015/16, registrations remained in line with the previous year with 152,329 new home registrations, marginally ahead of the 152,262 registered in 2014/15. There was also a 10 per cent increase in the number of new home completions for the financial year up to the end of March, compared to 2014/15, with 137,396 completions in total.
“This increase mirrors the strong growth seen in registrations in recent years, resulting in these new homes being completed over the first few months of 2016,” says the NHBC.
As the leading warranty and insurance provider for new homes in the UK, NHBC’s registration statistics are a lead indicator of UK house-building activity. Indeed, HBF and Glenigan’s latest Housing Pipeline report shows that initial planning Permission for 255,032 new homes was granted in England in 2015 – up 57 per cent from a low point of 162,204 in 2009. Permissions have risen steadily every year since 2009, says the HBF, with actual housing supply also increasingly markedly over the past two years as more of the permissions are progressed to the point that infrastructure work can start and house builders can begin building new dwellings
“Whilst the increase in the number of permissions is welcome – and a strong indicator of future supply – many still have to navigate the complexities of the planning system,” comments Stewart Baseley, Executive Chairman of the HBF.
“This is a further sign that house builders continue to step up investment in future housing supply but we need to see these permissions being processed to the stage where we can get onto site and start building more quickly and really start to meet demand for housing.”
The RICS also pinpoints the planning system as a major headwind for the construction industry.
“Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector,” agrees Rubinsohn. “We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.”
Rubinsohn adds, though, that the climate of uncertainty caused by the upcoming EU referendum could also be a factor.