House building continued to grow in the UK in February, according to Barbour ABI’s Economic & Construction Market Review.
Chancellor George Osborne revealed in his Budget statement on Wednesday that 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 GBP1.83bn – a significant increase of 72 per cent on the same month last year.
These latest figures, taken from Barbour ABI’s Economic & Construction Market Review, also reveal that London is still the country’s house building capital, with 17.5 per cent of all residential construction contracts located in the city. Key projects include phase one of the development at ‘One Woolwich’ worth GBP35m, the GBP25m transformation of 60 Commercial Road near London Metropolitan University into student accommodation and the West Hampstead private residential scheme valued at GBP25m.
Trading updates from most the UK’s major house builders reflect the residential construction sector’s resurgence over the past 12 months. Bovis and Taylor Wimpey both posted full-year profit increases of 39 per cent, Persimmon is up 49 per cent and Barratt Homes has reported a 162 per cent increase in profit for the six months to the end of December 2013.
Michael Dall, lead economist at Barbour ABI, says: “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 per cent on January and were 51.5 per cent 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 GBP500m of finance to small house builders, as well as GBP150m 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.”