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UK housing starts on track for 10-year high

UK housing starts on track for 10-year high
October 26, 2017
LONDON (Reuters) - British construction companies applied to build the greatest number of new homes in a decade during the three months to the end of September, taking account of the time of year, industry data showed on Thursday.

Builders registered in the third quarter of 2017 that they planned to build 37,936 homes, 9 percent more than during the same period last year and the highest third-quarter total since 2007, Britain’s National House-Building Council said.

The NHBC data is based on applications for construction insurance, which covers about 80 percent of new homes in Britain and is typically purchased shortly before construction starts.

“This is positive news for the industry and prospective homebuyers, particularly in light of the current political and economic uncertainties,” NHBC chief executive Steve Wood said.

Britain’s economy suffered a weak first half to the year, as higher inflation hurt consumer spending, and many businesses have been cautious about investment due to uncertainty about the terms on which Britain will leave the European Union in 2019.

The NHBC data suggests the construction industry may be heading for an upturn later this year, after a weak third quarter in which annual growth slowed to 2.8 percent from 4.1 percent, according to official figures.

Britain has a long-term housing shortage, especially in southern England, and earlier this month Prime Minister Theresa May pledged a further 10 billion pounds to the Help to Buy programme which subsidises new construction.

There was also positive news for commercial property. A quarterly survey by the Royal Institution of Chartered Surveyors showed that demand for commercial property from both tenants and investors picked up modestly over the past 12 months.

The strongest demand was for industrial sites, while appetite for offices was flat and retail demand fell.

Both the NHBC and RICS surveys showed similar regional patterns. Activity was weakest in London, where housing starts were down by more than a third over the past year and the highest proportion of surveyors judged commercial property to be overvalued. The biggest rises in house-building registrations was in Scotland, with large jumps too in northeast and central England, as well as Wales.