The National House Building Council’s latest data indicates a potential recovery in the house-building sector amidst ongoing challenges.
- New home registrations increased month-on-month in the first quarter of 2024, showing signs of sector growth.
- Despite this, first quarter registrations remain 20% lower compared to the previous year, reflecting persistent economic challenges.
- Certain regions in the UK have bucked the trend, with increased registrations in London, Scotland, and Northern Ireland.
- Key industry figures express cautious optimism while emphasising the need to address planning and skills challenges.
The latest figures from the National House Building Council (NHBC), a leading provider of new home warranties, suggest a cautious but positive shift in the house-building sector. The first quarter of 2024 saw an increase in new home registrations month-on-month, indicating potential growth after a period of decline. While January, February, and March recorded rises with 6,557, 7,090, and 8,320 new homes registered respectively, these numbers are still 20% lower than those in the first quarter of 2023.
Despite the positive month-on-month trajectory, the overall first-quarter numbers reflect a challenging economic landscape. Completions in Q1 2024, although amounting to 26,240, were 13% down from the same period in 2023. Economic headwinds, compounded by adverse weather conditions, such as the exceptional rainfall in southern England during February, have impacted construction outputs significantly.
Distinct regional variations were observed, with most areas experiencing a downturn in registrations compared to the previous year. The East Midlands, Wales, and Northwest and Merseyside regions saw substantial drops in registrations by 43%, 43%, and 41%, respectively. In contrast, London (up by 2%), Scotland (up by 4%), and Northern Ireland (up by 23%) exhibited resilience, highlighting regional discrepancies in market recovery.
The private sector also faced declines, with 13,633 registrations in Q1 2024 marking a 21% drop from the previous year. Similarly, the rental and affordable housing sectors witnessed a fall, with registrations down by 19%. Despite these figures, there is some repositioning by major house-builders towards addressing affordable housing demands.
Steve Wood, NHBC’s chief executive, articulates a nuanced outlook, recognising the market’s current constraints while acknowledging the signs of recovery. He cites rising mortgage rates driven by increased Bank of England base rates and the burdensome planning system as pivotal factors affecting market dynamics. Despite these hurdles, Wood notes a cautious optimism within the industry, driven by consistent monthly registration increases since January and anticipates improved build volumes as economic conditions stabilise. Addressing planning inefficiencies and the national skills shortage, projected at needing 225,000 additional workers by 2027, are deemed critical for sustained recovery.
The house-building sector shows signs of recovery despite ongoing economic and environmental challenges.
