UK housing starts rise in first quarter but completions fall

Home registrations in the UK went up by 25% in the first quarter of 2022 compared to the same period last year, according to figures from the National House Building Council. 

A total of 45,991 new homes were registered to be built - equivalent to a start on site - in the first three months of 2022, compared to 36,665 in quarter one of 2021. 

However, completions saw a slight decrease of 4%, from 33,222 in January to March 2021 to 31,874 in the first quarter of this year.

The NHBC put this drop in completions down to “some disruption caused by materials’ shortages and supply chain challenges”.

Private sector registrations were a key driver in the rise of registrations, shown by the NHBC figures, representing an increase of 31% to 35,134, from 26,773 in quarter one of last year. This was due to builders responding to high consumer demand for new homes, the organisation said. 

The growth in the Built to Rent sector drove an increase in rental sector registrations, up 10% from 9,892 in the first three months of 2021 to 10,857 in quarter one of 2022. 

London’s registrations grew 51% rise in first quarter of 2022, and other regions experienced significant growth, including Wales (+84%), East Midlands (+65%) and West Midlands (+52%). There were small dips in registrations in Northern Ireland (-8%), Scotland (-6%) and the East (-16%).

Oliver Knight, head of residential development research at Knight Frank, agreed. “There’s a bit of an impact because of build cost inflation,” he said. “Build cost inflation isn’t going away and house builders are going to have to navigate it. We will probably continue to see it bite this year.”

However, he said the market “has been good” and new housing starts have been “relatively robust”. Knight said: “Looking at the performance of house builders over the last two years, they are relatively able to cope with those pressures”.

Knight said the registration figures “certainly reflects what we’ve been seeing in the new homes market for sales”. 

The data comes after affordable housing starts in the capital rose 41% in the year to March 22, according to statistics released by the Greater London Authority last week.  However, the figures also follow contrasting official figures from construction output data and EPC registrations, both of which have appeared to indicate a slowing in residential construction in recent months.

NHBC Chief Executive Steve Wood said: “We have seen a strong start to the year with a 25% uplift in new home registrations in the quarter, reflecting a reasonably buoyant new build market and strong forward sales.

“Material and labour supply shortages continue to be a challenge, but this is now being managed by housebuilders as ‘the new normal’.

“Inflationary pressures and the strain on household budgets may yet impact market activity, with this likely to be dampened by continued strong demand in both private sale and rental sectors.”