Despite the gloom over Brexit and warnings of a slowdown in the property market, the construction industry got off to a flier at the start of 2017.
Construction contracts totalled £6bn in January alone, and the private housing market accounted for over 90% of those contracts.
This will be welcome news to many, who see the UK housing market as severely overheated, with demand overwhelmingly outstripping supply. The housing market continues to see increased prices that bounced back in conditions that might have flawed other industries.
Nevertheless, the central London property market has suffered significantly since the introduction of a stamp duty surcharge, on second homes or non-residencies of 3%. This increases for those thinking of buying-to-let, where there is banding with a ceiling of 15% for those homes costing over £1.5 million. The rest of the UK has seen prices increase, with the national average being 4.5%, which many forecasters believe will halve in the coming year.
The pessimistic outlook for the year was driven by rising costs in building materials, which was expected to have had an impact on contracts and projects.
This time last year, the Construction Products Association (CPA) had forecasts of around 4% growth in output, whereas the political uncertainty in light of a departure from the European Union, has seen this total revised down to just 0.8% output forecast for this year.
February was rather poorer news for bricks-and-mortar task of house-building, as it fell to its slowest pace in six months, with research suggesting that there has been an uptick in civil engineering projects.
Over the next five years there are a number of vital infrastructure projects that are earmarked, and the beginning of these projects will give the industry a further boost.The big ticket developments are rail network projects that will open up the regions to the nations’s capital, and also development of the road network to boost regional connectivity.
The most ambitious projects – should they get the green light and for work to begin – are continuing the construction industry’s momentum; key infrastructure projects such as the HS2 High Speed Rail Network and the power station Hinkley Point C, in Somerset are vital to the health of the industry over the next 12 months, and its continued growth.