New home contracts at highest level since 2008
Published: 24 November, 2014
The number of contracts for new homes increased for the sixth consecutive month in October and is at the highest level since 2008, according to figures released last week (20 November) by Barbour ABI.
Barbour ABI’s latest Economic & Construction Market Review revealed that the total number of contracts for new homes awarded in October increased by 9.2% from the month before and were 34.2% higher than in October 2013.
While the number of residential units continues to increase, contract values fell slightly in October, with values 0.6% down on September and 6.2% lower than the same month last year. Experts believe this may be an indication that the recent boom in housebuilding is beginning to spread to other parts of the UK, as opposed to a concentration in London where values tend to be higher.
Michael Dall, lead economist at Barbour ABI, commented: “With rumours of a cooling housing market, it’s encouraging to see the residential sector still performing strongly in October, accounting for 30% of the total value of contracts awarded.
“The fact that the number of units is on the increase, but values aren’t, shouldn’t prove too concerning for the industry, as this is more than likely due to a wider geographic spread of housebuilding contracts to areas such as the South West (13.9%) and South East (13.2%).
“After its recent sluggish performance, it’s also positive to see the infrastructure sector featuring prominently this month with 22% of the total value of all projects. With the sector showing growth in the latest ONS Construction Output figures, perhaps this is evidence of projects in the pipeline beginning to translate into activity on the ground.”
The report also showed that the UK witnessed an overall increase in construction levels in October with the value of new contracts awarded worth £6bn. This is a 5.9% increase from September and 6.1% higher than the value recorded in October 2013, an indication of further growth in the fourth quarter.
This report follows news that new home registrations have hit their highest level since 2007, revealed in the National House-Building Council’s latest quarterly statistics.