Poor weather and economic conditions make for bleak first quarter picture
The number of new homes registered to be built in the first quarter of this year was 20% down on the same period in 2023, according to the National House Building Council (NHBC).
Figures released by the UK’s largest provider of new home warranties and insurance show 21,967 new homes were registered to be built in Q1 2024.
In the same period, 26,240 new homes were completed, 13% down on the 30,071 completions recorded in Q1 2023.
The fall was attributed to continuing economic challenges, skills shortages and poor weather conditions.
“Our Q1 2024 figures reflect prevailing market conditions. Rises in the Bank of England’s base rate have driven mortgage rates higher, leading to a drop in new home purchases and a slowdown in house price growth,” said NHBC chief Steve Wood.
“Prolonged wet weather has also hampered house building output in Q1, with the south of England experiencing its wettest February since 1836, according to the Met Office, and many parts of southern England recording well over twice the average rainfall.
Despite the negative figures, NHBC pointed to some tentative signs of growth.
New home registrations increased month-on-month in the first quarter. 8,320 new homes were registered to be built in March compared to 6,557 in January and 7,090 in February.
Q1 2024 registrations were also higher than Q3 and Q4 2023.
“House builders are cautiously optimistic and it is encouraging to see signs of growth, with a month-on-month increase in registrations since January,” Wood added.
“This is despite a cumbersome planning system that continues to impede output and a national skills gap that means almost 225,000 extra workers will be required to meet expected UK construction demand by 2027.”
Across the UK, nine of 12 regions saw a fall in registrations compared to Q1 2023, with the biggest drops in East Midlands (-43%), Wales (-43%) and North West and Merseyside (-41%).
Wood said build volumes were expected to rise in the second half as economic conditions improve.
“Any new home-buyer incentives ahead of the general election would also have a positive impact on house-building activity,” he said.
“We are seeing early signs of growth returning to the private sector, and affordable house building is holding up well, but skills and planning challenges must be addressed to truly accelerate market recovery.”
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