Market analysts Barbour ABI found the value of UK residential construction projects was also up last month, reaching a total of £2.3bn, up 33.5% on September and 5.7% on last year.
Values had been boosted after a number of big residential schemes in London and the North West, such as Chrisp Street and Kidbrooke developments, the analysts said.
Barbour ABI’s data is based on a three-month rolling average. The firm said the monthly
increases in values suggested a continuing recovery in the housing market after the initial post-Brexit shock in July.
However, it cautioned that subsequent months’ data would be more revealing about the extent of the Brexit effect on residential housing and the construction sector more generally.
Lead economist Michael Dall said: “Housebuilding now beginning to thrive is no major surprise, as the strain on housing stock and government targets have become a matter of national attention. What did actually surprise was the significantly large value of residential construction contracts this month, reaching £2.3bn, the highest monthly figure ever recorded for residential construction since Barbour ABI reporting began back in October 2010.”
Overall, the number of new construction projects was up 3.3% in October, reaching a value of £5.9bn. However, it was still down on last year, with volumes 20.5% lower than last October and values down 18.3%.
The sector was held back by new infrastructure contracts, which had continued on their falling streak throughout the month, with values down 3% on September and 41.6% on last year.
Commercial projects were also down. The value of contracts awarded in the commercial and retail sector was £623m in October, representing a 2.7% decrease from September and a 28.4% decrease from the October 2015 figure.
Dall said: “The turnaround for housebuilding this month will give industry leaders, investors and the government well needed breathing room. However the majority of the other construction sectors continuing to lag after the post-Brexit vote is a cause for concern, particularly infrastructure and commercial and retail, two sectors that are usually accurate indicators of how the overall economy is performing.”
The government set out £7.2bn of housing investment in Wednesday’s Autumn Statement to aid house building. It said this ‘effectively doubled’ annual capital spending on housing over the course of the Parliament.
The measures included a housing infrastructure fund of £2.3bn to potentially deliver up to 100,000 homes alongside £1.4bn for affordable house builds by 2020/21.
Chancellor Philip Hammond also announced £2bn of funding to pilot accelerated construction to speed up building on public sector land while a further £1.8bn of extra spending by housing associations was found from other sources.