Despite George Osborne claiming that ‘We are the builders’ in his March Budget, the rate of private housebuilding in Britain slumped to a three-year low during the first quarter of 2016, according to the latest industry market survey.
The Royal Institution of Chartered Surveyors report shows that despite the government’s pledge to build 200,000 new homes by 2020, the private housebuilding sector “slowed considerably” during the first three months of the year.
With planning delays and increased concern over June’s EU referendum, the RICS survey found workloads among housebuilders increased at the weakest pace since the second quarter of 2013.
Only 36 per cent more of those working in the construction sector reported a rise in growth rather than a fall over the first quarter of 2016. During the first quarter of 2015 that figure was close to 50 per cent.
According to the survey’s findings, while 33% more respondents saw workloads rise during the last quarter of 2015, this figure has dropped by 5% over the past three months.
The survey also revealed a sharp drop in confidence. This time last year, 79% of construction professionals expected to see workloads rise. This has decreased to 55%.
Charles Holland, head of residential development and investment at Marsh & Parsons, believes the latest study shows that the construction market is making steady headway, “albeit not at the fast and furious rates we have seen over previous quarters”, he said.
“Workloads among private housing companies continue to increase, suggesting that – spurred on by Government policies such as Help to Buy and home discounts – demand at the first-time buyer end of the market remains high, and housebuilders are catering for this.
“Within London, despite remaining well above the long-term average, this quarter has seen the construction of new homes fall by around 40 per cent.
“According to the GLA, he capital needs to deliver 42,000 homes over the next 10 years to keep pace with demand in the market – and at this pace of construction growth, we will struggle to meet this target.
“There’s been much talk about loosening planning permission and freeing up Government land as a way of taking residential construction in the capital up to the next level.
“Both are valid points but addressing the current skills shortage in the construction industry is the real key to unlocking a housebuilding boom.
“With the profession still struggling to replenish the jobs it lost post-financial crisis, a concerted Government effort to get more people into building jobs would increase construction output, so we can start hitting the levels of housebuilding the capital urgently requires.”