UK housing activity rises at quickest pace since September 2022Newsflash: Growth in Britain’s housebuilding sector has hit its highest rate since the mini-budget almost two years ago.
Data provider S&P Global has reported that UK residential construction work “gained momentum” in August, with growth accelerating to its fastest since September 2022.
This increase in housebuilding was due to “improving market conditions” and lower borrowing costs, S&P Global says.
However, civil engineering growth slowed last month, which pulled the overall construction PMI down to 53.6 in August, down from July’s 26-month high of 55.3.
Photograph: S&P GlobalTim Moore, economics director at S&P Global Market Intelligence, says:
“The UK construction sector appears to have turned a corner after a difficult start to 2024, with renewed vigour in the house building segment the most notable development in August. Residential work expanded at the fastest pace for almost two years as lower borrowing costs and a gradual recovery in market conditions helped to boost activity.
Commercial building was the best-performing part of the construction sector as the improving UK economic backdrop resulted in stronger order books, but the postelection bounce in demand faded somewhat in August.
Borrowing costs jumped after the September 2022 mini-budget, driving up mortgage rates and making it harder for buyers to get a home loan. Mortgage rates have been dropping this summer, as the City anticipates more interest rate cuts from the Bank of England.
The Labour government has pledged to “get Britain building again” by bringing back compulsory housebuilding targets, and to build 370,000 homes a year during the course of the current parliament.