This year will be the first since 2010 that sees growth in new work construction output across all regions of Great Britain.
In 2013, growth occurred in all but three regions – Yorkshire & Humberside, the North-east and the South-east. If the UK economy can ride out a modest rise in interest rates, growth can be expected to run on into 2015 in all regions.
Last year there was an unhealthy reliance upon private housing for output growth; it accounted for 60 per cent of growth.
This will reduce over 2014 to around 45 per cent. But given this market’s size and its vulnerability to increased interest rates, its importance to continued growth is of concern.
Across all regions, the public sector now has a major influence on private housing – and housebuilding overall. Through Help to Buy and the affordable homes purchase programme, the government currently underpins 35 per cent of English private housebuilding.
When including housing association and local authority build-to-rent programmes, the public sector is currently behind 50 per cent of all new housebuilding in England, up from 20 per cent two decades ago.
While growth in all regions is undoubtedly positive, the fact that much of that is based on government involvement suggests the general public can’t afford what the market offers. This represents a concern for the future.
Martin Hewes is an economist and founder of Hewes & Associates