Private house building falls to lowest level in nearly three years

Private housing construction rose at its lowest level since the second quarter of 2013, data from the Royal Institution of Chartered Surveyors has revealed.

Despite the Government promising to deliver 200,000 new homes by 2020, RICS figures for the first three months of 2016 show 36% more of those working in the sector reported a rise in growth rather than a fall.

This is down from close to 50% this time last year and a similar level to the second quarter of 2013 when it was 31%.

Chancellor George Osborne has used the phrase ‘we are the builders’ in a number of speeches to signify government backing for house building.

But across all sectors, the RICS UK Construction Market Survey shows that while 33 per cent more respondents saw workloads rise rather than fall during the last quarter of 2015, this figure dropped by five per cent over the past three months.

Confidence in the outlook for the sector also dropped with the number of construction professionals saying that they expected to see workloads rise over the next 12 month outweighing those expecting a fall by 55%.

This is a considerable decrease on expectations from this time last year when 79% more respondents expected to see workloads rise.

Simon Rubinsohn, chief economist for RICS, blamed planning delays and uncertainty over the EU referendum.

He said the Government should do more to free up private brownfield sites to build homes, adding: “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 focused 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 report comes as the National House Building Council prepares its own first quarter figures to be released next week.

Its early data in February showed more than 12,000 new homes were registered to be built in the UK in the second month of the year. This was up 4% year-on-year but an 8% fall since November 2015.

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