House building valued at £1.8bn in February off the back of help to buy
House building continued to grow in the UK in February, according to a report released today. It follows announcements in the Chancellor’s Budget that revealed the Help to Buy equity loan scheme will now be extended until 2020.
Residential construction accounted for more than a third of all UK contracts awarded by value in February, totalling more than £1.83bn – a significant increase of 72% on the same month last year.
These latest figures, taken from Barbour ABI’s Economic and Construction Market Review, also reveal that London is still the country’s house building capital, with 17.5% of all residential construction contracts located in the city. Key projects include phase one of the development at One Woolwich worth £35m, the £25m transformation of 60 Commercial Road near London Metropolitan University into student accommodation and the West Hampstead private residential scheme valued at £25m.
Trading updates from most the UK’s major house builders reflect the residential construction sector’s resurgence over the past twelve months. Bovis and Taylor Wimpey both posted full-year profit increases of 39%, Persimmon is up 49% and Barratt Homes has reported a 162% increase in profit for the six months to the end of December 2013.
On the findings of the report, Michael Dall, lead economist at Barbour ABI, commented: “As expected, the residential construction sector experienced year-on-year growth for a third consecutive month in February. Importantly, the number of units associated with residential contracts awarded increased by 1.8% on January and were 51.5% higher than February 2013, confirming the scale of the upturn in the market over the last year.
“It’s clear that stimulus packages such as Help to Buy are having a significant and sustained impact on house building, with strong evidence of increased profits across the industry. The Chancellor’s commitment to providing a further £500m of finance to small house builders, as well as £150m to help people build their own homes, will also be widely welcomed by the construction industry.
“However, there are still concerns that these prolonged initiatives will drive up house prices and make homes in some places, particularly London, unaffordable for first-time buyers looking to get onto the property ladder.”
The Economic and Construction Market Review is a monthly report designed to give valuable, current insight into UK construction industry performance. It is compiled from Barbour ABI’s records of construction data for every UK planning application, and key indicators, such as the Office for National Statistics’ Construction New Orders data.
Report highlights:
– The total value of new UK construction contracts awarded in February was £4.8bn based on a three-month rolling average – a decrease of 13.5% from January but a 15.3% increase on the value recorded in February 2013
– The number of construction projects within the UK in February was down 19.2% from January but 12% higher than February 2013
– Residential had the highest proportion of contracts awarded by value in February with 35% of the UK total
The majority of contracts awarded in February by value were in London, which accounted for 19% of the UK total
