According to a report published by the Construction Products Association, construction output is forecast to grow 4.7% in 2014 and a further 4.8% in 2015, providing an additional £11 billion of activity to the UK economy in just two years.
The primary driver of growth in construction during 2013 was the £17.1 billion private housing sector. It is also the sector that has received the most effective intervention from policy makers. The direct impact of Help to Buy part one has been muted but the indirect impact on the housing market has been considerable.
Effective demand rose, through rises in mortgage lending, and private starts in Britain rose by 21.0% in 2013. Further growth of 18.0% in private starts is anticipated in 2014 with 10.0% growth in 2015 before post-election uncertainty regarding the future of Help to Buy Part One is reflected in more subdued growth.
Key Points Include:
- Construction output to grow 4.7% in 2014 and 4.8% in 2015
- Private housing starts to rise 18.0% in 2014 and 10.0% in 2015
- Commercial offices output to grow 10.0% in 2014 and 8.0% in 2015
- Industrial warehouses construction to rise 20.0% in 2014 and 10.0% in 2015
- Education construction to rise 2.2% in 2014 after three years of consecutive falls
- Health construction to fall, the sixth consecutive year of falls, due to lack of PFI work
A total of 43,821 new affordable homes will be delivered across 2,697 schemes under the Homes and Communities Agencies (HCA) 2015-18 Affordable Homes Programme, following a competitive bidding process for £886m of funding.
The HCA said that 160 housing providers across England would share £886m of affordable homes funding. The funding allocated comprises just over half of the total £1.7bn of funding available. The remaining funding will be made available for providers to bid into the HCA in due course via continuous market engagement (CME), as planned, to allow housing providers further opportunity to work up schemes for delivery by 2018.
The government’s target is for 165,000 new affordable homes to be built by March 2018.
Andy Rose, HCA Chief Executive, said:
“We have set in place a solid delivery programme that will ensure a smooth transition from our current affordable homes programme, and that delivery can start promptly.”
He continued to add:
“Just over half of the available funding has been allocated. The remaining funding will be allocated on a continuous market engagement basis, giving even more partners time to work up deliverable bids to meet local needs and their future development aspirations.
“This is a strong foundation that we are putting in place today, which puts us on track to make a significant contribution towards government’s aspirations for up to 165,000 new affordable homes by March 2018, while supporting overall housing supply and local economic growth.”