Despite government commitments to sector, UK construction market looks set to slow according to RICS

Published:  20 April, 2016

Despite the government promising to deliver 200,000 new homes by 2020, the latest survey by the Royal Institution of Chartered Surveyors (RICS) has revealed that growth in the private housing sector slowed down considerably during the first quarter of 2016.

Private housing workloads rose at their slowest pace since Q2 2013, with only 36% more of those working in the sector reported a rise in growth rather than a fall over the first quarter of 2016. Across all sectors, the RICS UK Construction Market Survey shows that while 33% more respondents saw workloads rise rather than fall during the last quarter of 2015, this figure dropped by 5% over the past three months.

Confidence in the outlook for the sector also dropped with the number of construction professionals saying that they expected to see workloads rise over the next 12 months outweighing those expecting a fall by 55%. This is a considerable decrease on expectations from this time last year when the majority of respondents expected to see workloads rise.

RICS chief economist, Simon Rubinsohn said: “On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘We Are The Builders’ speech, given the government’s significant commitment to this sector. One might well ask why growth in private housing workloads is softening at a time when policy is firmly focused on the creation of new starter homes. We have long held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.

“Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector. We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.”

Image courtesy of Shutterstock/ Maciej Czekajewski

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