UK construction at weakest level for four years as housebuilding stalls

The UK’s construction sector recorded its weakest performance since 2012 in the third quarter of the year, official figures have revealed.

Construction volumes fell by 1.1% in the quarter, the Office for National Statistics (ONS) said.

But despite the overall decline across the sector, the construction figures are better than had been indicated when the ONS published its first estimate of GDP figures last month, when it forecast a 1.4% fall in construction activity.

“Construction output has remained broadly flat in the last year, both before and after the recent referendum,” said ONS statistician Kate Davies.

Although construction levels, including housebuilding slowed quarter-on-quarter, with housing output estimated to have increased between Q3 and Q2 by 0.1%, it is worth noting that total housing increased by 8.7% in Q3 compared to the same quarter last year with private new housing increasing by 10.8%, marking another period of year-on-year growth.

John Tutte, Chief Executive Officer at Redrow, commented: “The data paints a much-improving picture for housing over the last year, with total new housing output up 8.7% annually and private new housing up 10.8%. This trend chimes with our own recent positive figures which revealed that last year we increased completions on homes by 17%, with our forward order book at record levels.

“Demand for homes is still incredibly high, a trend even Brexit has failed to dampen in our recent experience, and we have geared up our business for growth in response. We have doubled our annual output over the past five years to 4,700 much-needed new homes.”

Despite these achievements and the positive industry data, Tutte wants to see the government adopt policies which aim squarely at tackling the housing crisis, and views the housing minister Gavin Barwell’s announcement last week to stimulate more housebuilding as a positive step in the right direction, in particular the £18m capacity fund to help councils tackle planning issues.

Tutte added: “Councils are clearly under a lot of pressure in terms of resource and budget and policies like this will help overcome the problems housebuilders are facing in terms of achieving planning permissions and getting onto sites.

“We hope the upcoming Housing White Paper will outline more measures, with teeth, that will make a real difference over the coming years. In the meantime, we are continuing to focus on acquiring high quality sites for new, sustainable communities and attracting talent to our business.”