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UK housing starts indicator exceeds long-run average in 2015

by International Commercial Investment on January 28, 2016

Source: Reuters

The number of new homes registered for construction by British builders in 2015 rose to its highest since the financial crisis, despite a slowdown in the second half of the year, an industry group said on Thursday.

The National House Building Council (NHBC) said 156,140 houses and apartments were registered in 2015, up 7 percent from 2014 and a level last exceeded in 2007.

House-building is a hot political topic in Britain, with property prices rising as demand for housing outstrips supply.

The increase was driven by a surge in housing starts in the first half of 2015, which levelled off in the second half of the year. The overall growth rate was similar to 2014.

The NHBC said it expected further single-digit percentage growth in 2016.

Total registrations, which are a leading indicator for housing starts, rose 7 percent in 2015, slowing slightly from the 8 percent rise in 2014.

“There is still a long way to go before we are building the levels of new homes that were seen before the economic downturn, but 2015 represents consolidation on the growth seen over the last three years,” NHBC Chief Executive Mike Quinton said.

Britain’s government aims to build an extra million homes by 2020, amounting to 200,000 houses per year.

“It’s a challenge, we’re already at 170,000 completions. It’s heading in the right direction but I can’t guarantee we’ll get to (200,000),” Peter Andrew, deputy chairman of the House Builders Federation, told reporters at an NHBC briefing.

“There needs to be an emphasis on small housebuilders,” Andrew said, pointing out that large and medium-sized companies have driven the increase in housebuilding in recent years.

In the final three months of 2015, 38,594 new homes in Britain were registered, only 0.6 percent more than in the same quarter of 2014.

New home registrations in London, which accounts for about a fifth of the British total, fell by 9 percent in 2015 as a whole to 25,994. The NHBC said that followed two exceptionally strong years, adding that 2015 was still historically very strong.

The NHBC figures cover about 80 percent of the industry and are based on payments by homebuilders for insurance on projects that usually start within a few weeks, though sometimes later.

International Commercial InvestmentUK housing starts indicator exceeds long-run average in 2015