Strongest sector performance still below that achieved prior to the EU referendum

housebuilding

Growth in UK construction has become heavily reliant on the private housing sector, according to a new report published today.

The RICS’ latest UK Construction & Infrastructure Market Survey, covering the first three months of this year, said overall confidence had fallen almost to a six-year low, while access to capital was being squeezed.

But private housing workloads were comfortably in positive territory, with a net balance of +21% of survey respondents reporting a rise in activity, up from +20% in the last three months of 2018.

However, while its performance was the strongest in the sector, it was still below that achieved before the EU referendum, with political uncertainty and tax changes subduing growth, RICS said.

And although work through the implementation of permitted development rights (PDR) was expected to remain “a supportive factor”, the RICS said in research published in May last year it had “identified several areas of concern relating to quality and design”.

These included finding that the quality of residential permitted developments “was significantly worse than schemes which required planning permission, even though it clearly was still possible to deliver viable office-to-residential schemes through the more stringent full planning permission process”.

The RICS said the future of PDR and its contribution to the government’s target of delivering 300,000 additional homes “will need to ensure that regulatory safeguards and minimum dwelling standards are upheld”.

Planning delays had eased, the survey found, and were now in line with the average of the past six years.

“This has the potential to ease the housing shortage and speed up the delivery of developments. Interestingly, the number of respondents reporting a shortage of skilled labour reached its lowest level in five years.

“Whilst respondents still struggle to employ all skill sets, particularly quantity surveyors, only +41% more highlight this as an impediment to growth,” the report added.

 

 

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