Referendum uncertainty sees slowdown in house-building

House-building in London has “slowed down considerably”, according to a report published today by RICS, the Royal Institution of Chartered Surveyors, who blame a lack of skilled workers, a shortage of available building sites, and market uncertainties caused by the EU referendum.

Work to build new homes has slowed considerably in the first months of 2016, RICS report

Work to build new homes has slowed considerably in the first months of 2016, RICS report

In its quarterly report on the state of the house-building business, RICS found that in the first three months of 2016, only 20per cent more of those working in the sector reported a rise in activity rather than a fall. During the last quarter of 2015, that figure was 44 per cent.

And for all the promises of an accelerated programme of house-building from the Tory Government and Conservative Mayor of London to deal with the housing crisis, RICS says, that the “…easing in the private housing sector has not been offset by any increase in the construction of public housing, with growth in this sector remaining broadly unchanged from the previous quarter”.

A lack of enough skilled workers is proving a drag on development. “Labour shortages remain significantly above their long-term average and it remains the most significant impediment to growth in the region and more people reporting a shortage of blue collar workers in London than any other region in the UK,” RICS said today.

Simon Rubinsohn, RICS’s chief economist, said, “On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘We Are The Builders’ speech, given the Government’s significant commitment to this sector.

“One might well ask why growth in private housing workloads is softening at a time when policy is firmly focused on the creation of new starter homes. We have long-held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.

“Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector. We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.

“That said, we cannot discount the climate of uncertainty caused by the forthcoming EU referendum. We know that a range of sectors have been affected by these issues as investors look to delay any decisions until a final outcome has been determined, and construction is no exception.”


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