march 2010

Winter weather impacts recovery

The UK is in the grip of a very cold winter and the extreme weather has not helped the construction industry. New figures from the NHBC show that there was a fall in the number of applications to build new homes in January.

"Optimism is still prevalent across the housebuilding sector, but there is no escaping that the harshness of the weather has held back recovery during January," said Imtiaz Farookhi, chief executive of the NHBC.

"We must not let the tough weather conditions distract us from the encouraging signs seen since the autumn," he warned, adding that the industry must wait another month to see if the recovery witnessed in late 2009 will carry through into 2010.

This 'recovery' took the form of an increase in applications to build new homes across the UK during the rolling quarter November 2009 to January 2010. This is up 65% from the historical lows of the same period a year ago (from 14,738 to 24,315).

While positive, the figures have to be compared with the 38,459 applications made in the period November 2007 to January 2008. They show just how far the recovery has yet to go.

The number of new home registrations during January 2010 was 7,400 - a 56% increase on last year (4,752); but still well below the levels seen in January 2008 (11,512) and 2007 (17,770).

According to NHBC statistics for the three months to the end of January 2010, the recovery is largely due to the private sector, which saw applications of 16,684 for the quarter to January 2010. This is up 115% on the same period last year (7,768).

Public sector figures for the three months to the end of January were 7,631 - 9% higher than the same period a year ago (6,970).

The NHBC figures contrast with new Scottish Government statistics, which show an increase in public sector new builds, and a decline in private sector building.