The decline of social housing starts in England and Wales continued in the last quarter of 2014, new figures reveal
According to the latest Glenigan Residential Index, the 11 per cent drop in social housing starts in the fourth quarter of last year dragged down the growth rates of the residential sector as a whole. The drop comes after a huge growth of activity in the area in 2013.
Commenting on the figures Glenigan economics director Allan Wilén said: ‘After a flurry of social housing projects in 2013, there has been a marked decline over the last year in the number of projects being brought forward by social housing providers under the Government’s new funding regime.
‘The value of social housing projects starting on site during the final quarter of 2014 was 11 per cent down on a year ago. Furthermore, with detailed planning approvals down by a quarter against the final three months of 2013, the deterioration in starts appears set to persist into the New Year.’
The slowdown in starts is part of a trend which saw applications for social housing projects fall in 2014 due to cuts in government funding.
Figures released in October by the Department for Communities and Local Government showed that the number of new social housing schemes for rent in England plummeted by 71 per cent in two years from 37,690 in 2012 to 10,840 this year.
however other figures released by Glenigan showed that stamp duty reforms announced in the Autumn Statement had given the housing market a mild boost.
Wilén added: ‘The changes are also likely to push average house prices higher, as stamp duty savings improve affordability. Both of these factors would support further uplifts in the rate of private housing starts during 2015, though improved household finances and greater mortgage availability will be the more critical drivers.’
Private sector housing starts rose in Q4 of 2014 following a poor performance in Q3. The final quarter saw a 7 per cent rise in starts, which led to 15 per cent increase for 2014 as a whole. The combined value of residential starts during the fourth quarter of 2014 were flat on a year earlier, although the year as a whole saw expansion of 8 per cent.
The non-residential sector is up 4 per cent, led by double digit growth of the office and industrial project starts, however a 14 per cent drop in civil engineering activity cancelled out this rise, meaning the value of projects starting on site during the three months to December, is flat on a year earlier.
The monthly Glenigan Index is based on extensive research of every construction project starting in the UK over the previous three-month period, providing an indicator of developing activity and future output in the industry.