According to the latest official statistics, housebuilding output reduced in March for the second month in succession, sparking concerns housebuilders are responding to growing economic and cost pressures. Quadrant Smart delves into the data.
Figures from the Office for National Statistics showed that housebuilding output reduced by 1.2% in March, after a marginal drop in February. After seasonally adjusted housebuilding figures were released, it was revealed that just £3.7bn of work was completed in the month.
Despite this figure, it is slightly higher than seen in the same month last year, and substantial January numbers still boosted the first quarter output to a higher level than in 2021.
Further Reductions As Only 57,643 EPCs Registered
However, the output trend starting to tail off correlates with recent Energy Performance Certificate (EPC) data. The data indicates house building rates are beginning to fall, with just 57,643 EPCs issued in England in the first quarter of this year. A significant drop of 8 per cent in the same quarter a year ago highlights the issue is spread over the UK and not an anomaly in the data recorded.
Similarly, according to ONS, there has been an 8 per cent reduction in new orders in the housebuilding sector in the first quarter of 2022. Construction information provider Glenigan has also recently reported that the volume of residential construction work starting in April was 28% down on the previous year.
Housing Market Booms But No New Houses To Cope
With the housing market booming since the pandemic, a reduction in housebuilding is set to worsen the situation, especially for first time buyers looking to get on the market. Backed by the ONS figures, Housing output in the year to March was £42.8bn, 7% below the figure seen in March 2020.
In an election pledge, the Government set a 300,000 homes-a-year housing target. Since then, Housing Sec Michael Gove has appeared to distance the government from this commitment. Gove said aiming for a numerical target risked: “making an enemy of the common good.
Overall, the economy shrank 0.1% in March, compared to no growth seen in February. In the first three months of the year, the economy grew 0.8%.