Construction of new homes in UK hits 10-year high
British construction companies had their best year in decade for starting work on new homes in 2017 and the outlook for 2018 is positive, an industry body said on Thursday.
Prime Minister Theresa May wants construction of new homes to rise to 300,000 a year to tackle a shortage of housing.
The National House-Building Council said builders registered plans to start 160,606 new homes, up 6 percent from 2016 and the highest number since the start of the financial crisis in 2007.
Completions rose 4 percent to 147,278, the most since 2008.
British house-building halved after property prices fell by around a fifth during the financial crisis and has only risen slowly since, helped by government incentives to subsidise first-time buyers’ purchases of newly built homes.
Last year’s rate of housing starts was slightly above the average of the past 45 years, albeit below government targets.
Unlike Ireland, Spain and parts of the United States, Britain did not have a housing construction boom before the financial crisis. Tight planning rules and a shortage of skilled workers remain a key constraint.
Steve Wood, NHBC’s chief executive, said he expected housing starts to rise further in 2018.
“If the economy is sound, the housing market is sound,” he said. “I know there is a bit of an argument about whether we are going to lag behind global growth. But if we are still going to get growth, we will get growth in housing as well.”
Economists polled by Reuters on average expect economic growth of 1.4 percent in 2018 – weak by international standards but still better than some of the gloomier forecasts made after Britain voted to leave the European Union in June 2016.
Wood said construction workers – many of whom moved to Britain from eastern Europe – were becoming harder to find, but there was no sign of housing investment drying up ahead of Britain’s scheduled departure from the EU in March 2019.