UK housing starts edged up to highest since 2007 last year

LONDON (Reuters) – The number of UK housing starts registered for construction in Britain last year inched up to the highest since 2007, boosted by London’s recovery from the previous year’s Brexit-induced drop, industry figures showed on Thursday.

New home registrations rose by 1% in 2019 to 161,022, the National House-Building Council (NHBC) said, slightly above the average of 155,029 over the past 50 years though well below their pre-crisis peak.

NHBC provides warranties for new homes – which act as an early indicator of new housing starts – and covers just over three quarters of new construction.

Some 150,436 homes insured by NHBC were completed last year, up 0.5% from 2018.

Growth in 2019 hinged on a strong 7% annual rise in housing starts between July and September, but there was a 3% fall in the final three months of the year – echoing weakness elsewhere in the economy at a time of political turmoil.

London was the strongest performing region, with new registrations were up 37% in 2019, in a marked turnaround from 2018 when uncertainty surrounding Brexit saw new registrations in Britain’s capital fall by 10%.

Across the country as a whole the picture was mixed. New home registrations went down in all parts of the United Kingdom except London, central and eastern England, and Scotland.

Official data for the 12 months to November showed a 2% increase in total construction, which includes commercial and infrastructure projects and maintenance, as well as homes.

Recent private-sector construction data has shown a pick-up in demand for British builders since Prime Minister Boris Johnson’s election win in December cleared the political deadlock surrounding Brexit.

Respondents said the reduction in uncertainty could unlock new projects and boost client spending.

The Conservative-majority British government wants around a million homes to be built over the next five years and for annual house-building to reach 300,000 a year by the middle of the decade.

But the house building industry faces challenges over skills, the supply chain and the environment, NHBC Chief Executive Steve Wood said.

Wood added:

“This momentum needs to be maintained as we enter a new decade.”

The Bank of England held off from cutting interest rates last month while it waited to see if the improvement in sentiment translates into stronger economic growth.

Kindly shared by Reuters UK