House construction down 17%

Thursday, 12 June 2008 9:39 AM

Orders for public and private housing in the UK fell by 17 per cent in April, when compared to a year earlier.

The findings, released by the Office for National Statistics (ONS), provide further evidence of the sharp correction presently sweeping the property market.

With liquidity restrained and demand falling, as buyers bide their time before making a purchase, orders for new-build properties have been sharply curtailed.

More recently the change has been even more dramatic.

Orders in the three months to April 2008 fell by 25 per cent compared with the previous three months, and fell by 35 per cent compared with the same period a year earlier.

Furthermore, the ONS also confirmed public housing and housing association orders fell by 8 per cent in the 12 months to April 2008 compared with the previous 12 months.

Public housing and housing association orders in the three months to April 2008 also fell by 26 per cent compared with the previous period, and fell by 23 per cent compared with the same three months a year ago.

The slump in new-build properties has been caused by the liquidity crisis and wider economic turmoil, according to the Home Builders Federation (HBF).

As HBF spokesman Steve Turner explains: "The industry has been gearing up to meet the challenging target of three million new homes required by 2020 under government proposals - therefore potentially increasing supply.

"However, developers have been reticent to build with buyers unable to afford property."

As such, the present slump in building will have negative long term connotations.

Supply remains limited, with new homes required, according to the HBF, and the present slowdown will create a backlog of demand which must be met in the future.

In response the HBF calls on the government to take steps to increase liquidity in the market.

Chris O'Toole

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