Residential starts plummet by nearly a third
The number of residential schemes starting on site has fallen by 31 per cent in the last year
The figures for three months to May, compared to the same period last year, indicate a 32 per cent drop in private residential and 28 per cent tumble in social housing schemes.
The research by industry monitor Glenigan also shows private housing declines of 76 per cent and 42 per cent in the North East and South East of England respectively. London was the only area to defy the downward trend.
Allan Wilen, Glenigan economics director, explained: ‘The shrinking pool of new social housing work is in stark contrast to the rapid government funded growth seen this time last year, and further retrenchment is expected through the year.
‘The 14 [per cent] drop in gross mortgage lending reported by the Council of Mortgage Lenders report and the 1.2 [per cent] fall in house prices recorded by the Halifax paint a glum picture for the housing market that underlines the difficult trading condition faced by housebuilders.
‘Although house prices and mortgage approvals are expected to remain weak near term, Glenigan is forecasting a modest uplift in project starts during the second half of this year as developers open up new sites in anticipation of a brightening in market conditions during 2012.’
Looking at construction as a whole, the value of projects starting on site in the same period was 21 per cent lower than in 2010.
The underlying of value of hotel and leisure starts also halved during the period while office and industrial starts declined by 55 per cent and 31 per cent respectively. The only growing sector was retail.