Developers ‘wary’ as house building orders fall

  • 10/09/2018
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Developers ‘wary’ as house building orders fall
House building output grew in July but a sharp fall in orders in the second quarter of the year suggests developers are not willing to commit resources at present.


According to official statistics, private sector housing output rose by 4% in July – up £118m from June.

However, while this recovery was positive, data from the Office of National Statistics (ONS) also showed that order books in this sector had fallen substantially between April and June.

Following strong growth in Q1, Q2 saw a 17.6% fall in new housing orders down to a similar level seen in the last three months of 2017, the ONS said.

This was driven by private sector new housing orders which collapsed by 20.8% to £3.2bn worth of orders in the period.


Brexit handbrake

Blane Perrotton, managing director of surveyors Naismiths, noted that the pace of growth on construction output had eased and that builders were still playing catch up to the backlog built up during 2018’s deep-frozen first quarter.

“While contractors are clearly busy right now, few have full order books,” he said, adding that the slump in new orders “reveals just how wary developers are to commit to new projects in the current environment”.

Perrotton warned much of this was down to uncertainty over Brexit which was stalling the economy.

“Activity on existing projects is brisk, but with new orders now at their lowest level for five years, the industry is flying a holding pattern – waiting for something, anything, to break Britain’s political and economic limbo,” he said.

“The Brexit countdown clock may have little over six months left to run, but for now the confidence-sapping lack of clarity about what a non-EU Britain will look like isn’t just slowing investment, it’s applying the handbrake.”

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