New house building in the UK increased in July, up 5.6% compared to the same month in 2015, according to the latest construction figures to be published.
Overall output in the construction industry was flat month on month but new home building prevented the headline figure from going into negative territory, the data from the Office of National Statistics (ONS) show.
The volume of new orders in new housing increased by 25 % between the first and second quarter of 2016, the highest quarter on quarter increase since 1967 when growth increased by 44.1%.
The largest contribution to the increase in new orders in new housing in the second quarter of the year came from private new housing which increased by 28.2% to a level of £3.5 billion, the highest level since the second quarter of 2007 when it was £3.6 billion.
Compared with the same period a year ago private housing increased by 12.7% while public new housing increased by 4.4% but the ONS report says that it should be noted that the weight of public new housing is small at only 11% of total new housing.
The quarter on quarter increase of 28.2% in the number new housing indicate that the gloomy Brexit predictions are yet to be realized, according to Richard Connolly, chief executive officer of affordable rental homes provider Rentplus,
‘Despite this however, the figures do reveal the startling disparity between the private and public sector housing markets. The 8.3% increase in new private housing between July 2015 and 2016 is strikingly offset by an 8.6% decrease in the number of public homes being built,’ he pointed out.
‘This trend is reflected in the new start figures, with public housing accounting for just 11% of all new housing orders, well below Government targets. More urgently needs to be done to increase the number of affordable homes available and the delivery of these must become a priority,’ he explained.
‘Innovative solutions must be embraced to support a mix of housing options to best suit the range of needs of local communities. We hope that November’s Autumn Statement will be a pivotal turning point in addressing the housing shortage,’ he added.
However, with overall construction output flat, Andrew Bridges, managing director of Stirling Ackroyd, believes that it is still too early to say what the longer term impact of June’s referendum will be on house builders, the property market and the wider economy.
‘We must not allow Brexit to distract from the urgent need to build more homes, especially in London and the South East, which are both facing an intense housing shortage. The Chancellor’s Autumn Statement must give housebuilders the confidence to get on with tackling this fundamental issue in our society and extend opportunities for first time buyers, such as Help to Buy. As a former property developer, the industry will be expecting Phillip Hammond to step up to the plate and back house builders,’ he said.
