Private housing new work fell by 4.9% in July as fresh figures highlighted continued pressure on housebuilding activity across Great Britain.
The latest Office for National Statistics construction data shows the decline in private housing was the largest contributor to a 0.4% monthly fall in total new work.
Overall construction output edged 0.1% higher during July, following falls of 0.1% in June and 0.8% in May.
However, the increase was driven entirely by repair and maintenance, which grew by 0.8% during the month.
OUTPUT FALLS OVER THREE MONTHS
Across the three months to July, total construction output fell by 0.5%, ending a run of four consecutive increases in the three-monthly measure.
New work declined by 0.4%, while repair and maintenance was down 0.7%.
Six of the nine construction sectors recorded falls over the period, with private housing repair and maintenance making the largest negative contribution after declining by 1.7%.
The figures follow signs of weakness elsewhere in the housebuilding sector and underline the challenge facing the Government as it looks to increase housing delivery.
‘HOUSING AMBITION AND DELIVERY ARE TWO DIFFERENT THINGS’
Neil Leitch (main picture, inset), Managing Director of Development Finance at Hampshire Trust Bank, says: “These figures are another reminder that housing ambition and housing delivery are two very different things.
“If we want a genuine reset in housebuilding, we must address the conditions that determine whether developers are prepared to commit capital and start building in the first place.
“Development has become progressively more complicated and more expensive. Developers can spend substantial sums getting a scheme through planning before factoring in Section 106, CIL, biodiversity net gain and the additional costs and requirements around building safety. Meanwhile, local planning authorities are being asked to administer an increasingly complex system while many remain significantly under-resourced.”
“SME developers are becoming more selective.”
And he adds: “It is inevitable that against this backdrop SME developers are becoming more selective, concentrating their capital on sites where there is greater certainty around planning, costs and the route to delivery.
“These figures are the downstream consequence of decisions made months and sometimes years earlier. Government cannot continually add cost and complexity to the development process and then be surprised when fewer schemes make it onto site.
“The Government’s housing targets are achievable, but expecting the industry to deliver them without fundamental reform is not. Simplify planning, properly resource local authorities, reduce unnecessary cost and complexity and give developers some long-term certainty. Do that and there is no shortage of capable developers ready to build.”
