House-building suffered a setback in May as contracts awarded for new residential units reached its lowest point of the year, according to data released by Barbour ABI.
The new report found that contracts to build 8,175 new build residential units were awarded across the UK in May. This is almost 8,000 units lower than 2015’s peak of 15,812 units in January, and around 4,000 less than recorded in the previous month. According to historical data from Barbour ABI, this represents the lowest level of new house-building contracts awarded since November 2014.
Reports previously released in 2015 suggested that lower levels of activity throughout the construction industry were a result of uncertainty surrounding the outcome of May’s General Election. Michael Dall, lead economist at Barbour ABI, also believes this could be the case. He said: “With much uncertainty looming around the general election last month and a hung parliament looking like the probable outcome, it seems likely that investors and house-builders decided to wait for the outcome of the election before coming to a decision on significant house-building projects.”
However, with a stable Parliament established following the election of a majority Conservative Government, activity is expected to respond by growing quickly to levels seen before the period of uncertainty in early 2015.
The new Barbour ABI data suggests that residential construction has already had strong growth in 2015. Contracts were awarded to build 49,707 residential units in the first four months of the year, compared to 33,757 within the same timeframe in 2014, resulting in a 32% increase.
Mr. Dall added: “With the election now in the distant past, and the expansion of initiatives to support first time buyers, I expect house-building to bounce back in June and have a strong second half of the year.”
