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Public housing – Construction Products Association forecast

While not hostage to the battering seen by the shares of major private house builders in recent weeks, those operating in the public housing sector are not immune to the effects of the credit crunch.

The Construction Products Association forecast points out that tightening of Government spending may reduce funding for social housing, while local authorities looking for contributions from private developers in terms of Section 106 agreements to fund their public housing schemes may find that particular tap of money may well be turned off as well.

The association predicts a 4 per cent contraction in the public housing sector this year before bouncing back towards 2012. But this return to form of the market will not be enough, in the association’s eyes, to meet the Government’s aspirations to build 45,000 new public homes each year.

Public housing repair, maintenance and improvement works have been waning in recent years, down 3 per cent in 2006 and 2.9 per cent last year.

Decent Homes work was supposed to reverse this trend and in its first forecast in January this seemed to be happening.

But with orders 5 per cent down in the first few months of the year the scene has been set for a decline in the market that looks chronic, with no respite in site over the coming five years.