UK housing starts fell by 31% in the three months to May, compared to the same period in 2010 according to new data from construction industry analyst Glenigan.
Private housing project starts were down 32% while social housing projects fell 28%.
“The shrinking pool of new social housing work is in stark contrast to the rapid government funded growth seen this time last year, and further retrenchment is expected through the year” said Allan Wilen, economics director, Glenigan.
“The 14% drop in gross mortgage lending reported by the Council of Mortgage Lenders report and the 1.2% fall in house prices recorded by the Halifax paint a glum picture for the housing market that underlines the difficult trading condition faced by housebuilders. The fall in private housing project starts highlights developers’ reluctance to open up new sites while conditions in the wider housing market remain weak, preferring to build out and secure sales on existing sites,” he continued.
The North East and South East of England suffered 76% and 42% falls, respectively, for private housing development starts.
“Although house prices and mortgage approvals are expected to remain weak near term, we are forecasting a modest uplift in project starts during the second half of this year as developers open up new sites in anticipation of a brightening in market conditions during 2012.”