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RICS report highlights slowdown in private sector housing growth

According to the latest UK construction market survey for the first quarter of 2016 published by RICS (the Royal Institution of Chartered Surveyors) yesterday (20 April), growth in the private housing sector has slowed down considerably. This slowdown comes despite government commitments to new infrastucture and building programmes.

Private housing workloads grew at their slowest pace since the second quarter of 2013, with only
36% more of those working in the sector reporting a rise in growth rather than a fall over the first quarter of
2016.

Across all sectors, the 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 five per cent over the past
three months.

In addition, confidence in the outlook for the sector was down. The number of construction
professionals saying that they expected to see workloads rise over the next 12 months outweighed those
expecting a fall by 55%. RICS says this is a considerable decrease on expectations from this time last year when
79% more respondents expected to see workloads rise.

Commenting on the RICS report, Charles Holland, head of residential development and investment at London estate agent Marsh & Parsons, said:
“The latest RICS figures show a construction market that’s making steady headway, albeit not at the fast and furious rates we have seen over previous quarters. Workloads among private housing companies continue to increase, suggesting that spurred on by government policies such as Help to Buy and home discounts demand at the first-time buyer end of the market remains high, and house builders are catering for this.He continued: “Within London, despite remaining well above the long-term average, this quarter has seen the construction of new homes fall by around
40%.

According to the GLA, the capital needs to deliver 42,000 homes over the next 10 years to keep pace with demand in the market and at this pace of construction growth, we will struggle to meet this target.

“Mr Holland concluded: “There’s been much talk about loosening planning permission and freeing up Government land as a way of taking residential construction in the capital up to the next level. Both are valid points but addressing the current skills shortage in the construction industry is the real key to unlocking a house building boom. With the profession still struggling to replenish the jobs it lost post-financial crisis, a concerted Government effort to get more people into building jobs would increase construction output, so we can start hitting the levels of housebuilding the capital urgently requires.”

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