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New government figures: housing construction stagnates

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Growth in the housing construction market has been at a standstill since the middle of last year, according to the Office for National Statistics

Third quarter figures, covering July to September, showed total new housing output down 3.9 per cent compared to the same period last year.

Housing output by public bodies fell 23.3 per cent on the previous year – the fifth such fall in a row, while private housing output was up just 1 per cent.

The ONS said: “There was sustained growth in new housing from early 2013 to mid 2014, however, in more recent periods growth has flattened and the housing market is stagnating.”

Total housing output during the quarter was £6.9 billion, down from £7.2 billion in both the previous quarter and the third quarter of last year.

Third quarter public housing output fell from £1.5 billion last year to £1.1 billion this year, while private housing output rose slightly from £5.7 billion to £5.8 billion.

In its August construction output bulletin, the ONS attributed rises in early 2014 to recovering house prices and policies such as Help to Buy.

This month’s report showed that, overall, construction output across all sectors declined by 0.1 per cent compared to the third quarter last year – although it was down 2.2 per cent on the second quarter this year.

The statistics body said that downward pressure came mainly from the ‘all new work’ and ‘repair and maintenance’ categories which fell by 2.2 per cent and 2.1 per cent respectively from the previous quarter, with housing down 1 per cent on that quarter.

Meanwhile the autumn forecast by the Construction Products Association (CPA), released this week, said that private housing output is expected to rise 5 per cent in 2016 and 2 per cent in 2017, with public housing output expected to fall by 6 per cent and 1 per cent respectively.

Noble Francis, economics director at the CPA said: ‘Private housing starts are forecast to rise, with major house builders signalling their intention to build more homes over the next 12-18 months. 

‘Help to Buy accounts for one quarter of new build purchases and will help to sustain demand. 

‘Public housing, however, is expected to be adversely affected by uncertainty and a lack of funding due to the extension of Right to Buy to housing associations and cuts to social rent.’

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