Housebuilding activity has fallen for three consecutive months to November, worryingly for the new Labour government.
Subdued demand conditions, higher borrowing costs, and weak consumer confidence have all led to the decline, according to the S&P UK Construction PMI.
It means that housebuilding is viewed as the weakest performing part of the construction sector.
Josh Ward-Jones, director of Bloom Building Consultancy, said: “This is not the housebuilding boom the government wants.
“With the fundamentals of housebuilding seemingly stacked against them, many residential developers are holding fire and no amount of relaxation in the planning rules will get the new homes Britain needs built.
“With residential stuck in reverse, progress across the construction industry as a whole has slowed, and the rate of expansion has slipped to its lowest level for six months.
“Many housebuilders are proceeding with caution or not at all, and the government’s promise to get 1.5 million more homes built in England over the next five years is going to be very hard to keep.”
One positive was commercial activity was the fastest-growing area of the construction sector in December.
Meanwhile just under half of the construction firms surveyed were upbeat about the prospects for 2025, despite sentiment weakening since the first half of 2024.
Tim Moore, economics director at S&P Global Market Intelligence, said: “Concerns about the demand outlook weighed on construction sector growth expectations for 2025.
“Although confidence recovered after a post-Budget slump during November, it was still much weaker than in the first half of 2024.
“Many firms reported worries about cutbacks to capital spending and gloomy projections for the UK economy.”
