Private sector housing work up in construction industry – ONS

Private sector housing work up in construction industry – ONS

Output in the construction industry has declined overall with housing work down 0.2% in February.

However within the overall decline, private housing work which represents the bulk of housing work increased a huge 10.6% year on year, with a corresponding 3.9% increase from January according to the Office for National Statistics.

Public sector housing has decreased, down 2.1% month to month, and -18.6% year on year, despite central government pledges to directly commission work.

Comparing the 3 months, December 2015 to February 2016, with the previous 3 months, September 2015 to November 2015, construction output increased by 1.5%. All new work increased by 2.5% while there was a fall of 0.3% in repair and maintenance.

The increase in growth in construction output associated with new private housing activity is consistent with a rise in mortgage approvals for house purchases. According to the Bank of England’s Inflation Report there has been an increase in mortgage approvals for home purchases to around 74,000 a month on average in Quarter 1 (Jan to Mar) 2016, and much of this growth is coming from the buy-to-let sector.

According to the ONS this could be partly due to the pre-announcement of the change in stamp duty which may have encouraged individuals to bring forward housing transactions. The RICS construction market survey is also consistent with the increase in new private housing activity, showing that in Quarter 4 (Oct to Dec) 2015 private housing sector continued to drive growth.

Andrew Bridges, managing director of Stirling Ackroyd said: “Housing is the hero of the construction industry today – leading the latest charge. And housing holds all the urgency and intensity behind any hero. People need homes. But the latest surge is also inevitably flawed. New housing work could be galloping, as the ranks of renters and buyers swell every single month. But the doubts of planners are enforcing a dull and self-defeating march.

“London is the desperate heart of the nation’s construction struggle. It’s the most promising development prospect – with capacity to build and booming demand. New homes are needed now more than ever. But planning departments in London are still proving a major obstacle. The final quarter of 2015 saw just 7,240 new homes granted approval in the capital – well behind the levels needed to house a soaring population.

“Londoners want to be able to live in London and this should be fuelling growth in the construction industry. But until borough planning departments begin to approve more homes and allow developers to get building, all these plans are on pause. We need true leadership from the next mayor – to get the scaffolds up, permissions granted and people in homes.”

Josh Morris

Josh is the Journalist for the Today's Group and writes many of the articles for Today's Conveyancer. He graduated with a degree in Physics from Cardiff University in 2009 before training as a journalist.
He has previously written for The Times, The Mirror and The Daily Express.

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