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UK housing starts indicator highest since 2007 - NHBC

Published 30/01/2015, 00:05
© Reuters. An apartment block is constructed behind a row of traditional properties in central London
RDW
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British construction firms last year registered to build the highest number of new homes since 2007, but growth is likely to slow in 2015 as May's parliamentary election weighs on confidence, an industry group said on Friday.

The National House Building Council said 145,174 houses and apartments were registered in 2014, after an unexpected surge in the last three months of the year.

Total registrations, which analysts use as a leading indicator for housing starts, were 9 percent higher than in 2013 and the most since 2007. Registrations were up 17 percent in the fourth quarter from the last three months of 2013.

But NHBC chief executive Mike Quinton said construction registrations were likely to grow more slowly in 2015 to reach about 150,000, just under the average for the past 40 years.

"It's going to be around that mark. We were surprised by the Q4 numbers, and we could be surprised again," he said.

John Tutte, CEO of homebuilder Redrow (L:RDW), expected the number of homes sold across the industry to dip in 2015.

"Partly that will be the impact of the general election. I would be very surprised if that does not make people a little bit more cautious," he told reporters.

Britain faces its least certain election in decades on May 7, with opinion polls suggesting that neither the Conservative Party, which governs in coalition with its junior partner, the Liberal Democrats, nor the opposition Labour Party is likely to secure an outright majority of seats in parliament.

In the longer term, Tutte saw strong political support for more construction to tackle a housing shortage in parts of Britain which has helped drive up prices.

NHBC's Quinton said a target of 200,000 homes a year pledged by Labour and supported by some industry bodies was achievable but further government support would be needed to go above that.

The NHBC figures cover about 80 percent of the industry and are based on payments by homebuilders for insurance on projects that usually start within a few weeks, though sometimes later.

Britain does not publish a single set of national data on housing starts. Figures for England alone showed a 1 percent annual rise in housing starts in the third quarter of 2014.

The housing market has slowed since the middle of 2014, with fewer mortgages approved and smaller rises in house prices after regulators tightened lending rules.

© Reuters. An apartment block is constructed behind a row of traditional properties in central London

Tutte said Redrow experienced a slower second half of the year than in the first half. It reported a near doubling in profit in its financial year to June.

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