Housebuilding activity in September rose at the fastest pace since January with various developers reporting resilient demand and generally improving market conditions.

The surge in residential property activity helped the construction sector return to growth last month, with the closely-watched purchasing managers’ index (PMI) reporting its first growth for four months.

The PMI reading of 52.3 for the month of September, was comfortably above the 50 score which represents stagnation. It was also above the 49.2 recorded in August and well ahead of the 49 expected by economists.

Crucially, the reading was well above July’s seven-year low and indicated the fastest rise in construction output since March – driven by housebuilding.

Tim Moore, senior economist at IHS Markit and author of the index, said: “UK construction companies moved back into expansion mode during September, led by a swift recovery in residential building from the three-and-a-half year low recorded in June.

“Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum.

“A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work.” 

Given the desperate need for new homes in the UK, the jump in the construction of new homes is seen as a strong step in the right direction, which should be bolstered further by this week’s announcement of fresh government support to increase new homes delivery, according to John Tutte, chief executive officer at Redrow.

He commented: “It is encouraging to see housebuilding has not been impacted by ‘Brexit’ and is underpinning an upturn in UK construction activity.

“At Redrow we have been gearing ourselves up for growth over a number of years, building many more high quality homes to create new sustainable communities in response to increased demand. Last year we increased completions by 17% and we have doubled our annual output over the past five years to 4,700 much-needed new homes – our forward order book is also at record levels.

“Any government policy that has the potential to continue to accelerate housebuilding is very welcome but, as ever, the devil is in the detail and we are watching closely to see how this unfolds in the run up to the Autumn Statement. Meanwhile, we are doing whatever we can to continue to build more new homes, including efforts to boost the number and quality of the talented people we employ to overcome the skills shortage and also continuing to identify and acquire high quality sites.”