The outlook for new private
housebuilding work over the coming year has brightened in recent weeks.
After some tough times in 2023, an upturn in new housing output in January,
and a series of encouraging industry surveys and announcements from major
housebuilders, point to better times ahead for the sector, particularly in the
North and the Midlands.
Recent falls in mortgage rates and the prospect of cuts in interest rates
has given a lift to the overall housing market. The latest February RICS UK
residential survey of estate agents shows a more positive trend in buyer
enquiries and new listings, with sales expected to rise modestly in the
near-term and gain further momentum over the year. Most UK regions showed a
recovery in buyer interest.
As the spring selling season gets underway, the major new housebuilders have
also pointed to an improving market. Taylor Wimpey said recently that: “current
trading showed some encouraging signs of improvement with reduced mortgage
rates positively impacting affordability and confidence in our customer base.”
So far this year, the firm’s net private sales rate for its homes stands at
0.67 per site per week, up from 0.62 in the period last year. Meanwhile, its
sales cancellation rates are down.
Another major operator in the sector, Persimmon, said in early March that
whilst it expected market conditions to remain ‘subdued’ during 2024,
affordability had improved and it was positioning the business for sustainable
future growth over the medium-term.
The firm plans to open 30 new sales outlets for the spring selling season
and work towards expanding its outlet base back towards 300. In all, it expects
to deliver 10,000-10,500 house completions this year, up from 9,922 last year.
Persimmon also noted that whilst trading in its southern and eastern
counties remains more challenging, it has been offset by a more robust trading
performance in the northern regions.
This pattern is reflected in the March edition of the Glenigan Construction Review which highlights various regional brightspots beyond
the South East where opportunities for new housing work has been picking up.
It shows that the value of new housing project starts in the West Midlands
rose to £854 million in the three months to February, up 19% compared to the
same period a year ago. On the same basis, the East Midlands saw an 8% increase
in new housing project starts to £768 million.
Meanwhile, the new work pipeline for housing shows signs of improving in the
North West. Detailed planning approvals for new housing work in the region rose
13% to £1,974 million in the three months to February, making it the second
most active region in the country. Residential planning approvals in the South
West also rose 27% in the period and were worth £1,417 million.
Glenigan data provides numerous examples of new private housing projects of
varying sizes which are set to go ahead in coming months. At Chorley in
Lancashire for example, plans have been approved and work is due to start this
autumn on a £16.05 million scheme of 110 houses and 8 flats for Storey Homes (Project
ID: 21007585).
Elsewhere in Derby in the East Midlands, GMI Construction Group has been
appointed as main contractor on a £30 million development of 202 flats for
Godwin Developments at The Landmark in the town’s Phoenix Street. Work is due
to start this coming June and run for 20 months (Project ID: 18129747).
