House building in the North East is continuing to rebound with Chartered Surveyors across he region reporting growth, says the latest RICS (Royal Institute Of Chartered Surveyors) construction market Survey. During the third quarter of the year 34% more respondents reported rises in privately funded housing projects compared with the previous period, from an increase of 30% in the second quarter.
Significantly, across the country, this is the first time that every region has reported growth since the beginning of the market crash six years ago and demonstrates that the long awaited upturn in numbers of new homes may finally be under way. Furthermore, the overall construction sector in the North East saw a welcome boost during the three months to September, with work loads rising at their strongest rate since the fourth quarter of 2004- a net balance of an increase of 31%.
Alongside housebuilding, this growth was largely driven by private commercial developments as funding finally begins to filter through to actual shovels in the ground. This will prove welcome news to an economy that has seen construction struggle for some time. One North East developer reporting increased visitor levels and sales at its developments in the region- 22 in all- is Barratt Homes. Managing Director Mike Roberts said: “We are starting to see signs of recovery in the housing market. Customer interests is growing and there is a considerable amount of pent up demand”. We are opening new sites across the region to help meet that in recent months we have started work on nine different Barratt and David Wilson developments for more than 750 new homes at Burnopfield, Consett, Hebburn, Killingworth, Lemington, Nurthorpe, Scotswood, Stockton and Thornaby. These will support around 1,500 jobs.
The Government’s help to buy scheme has generated much demand for new-build homes. Mr Roberts added: “The scheme is the most significant opportunity the new build industry has had since downturn and there’s no doubt it is continuing to give a real boost to buyers locally”. As the summer drew to a close, there was also good news for employment is already being reflected in a jump in reported skill shortages, highlighting the potential for the capacity issues if the recovery continues to gather pace. Significantly, Surveyors are expecting a sharp acceleration in business activity over the next 12 months. This optimism was also reflected in positive predictions for company profits as the sector begins to dig its way out of the downturn.
George Penrice, FRICS of Sanderson Weatherall, Newcastle said : “Construction work is increasing, with the successful contractors now picking and choosing the contracts they want to tender for. This is likely to drive up prices until there is a balance between demand and supply”. Simon Rubinsohn, RICS chief economist adds: “While it’s good news that construction – and especially housebuilding – is finally on the rise right across the UK, we are certainley not out of the woods yet. “Critically, we’re still way behind in the terms of building enough homes to meet the nation’s growing housing need and overall construction projects are at a historical low. “In the face of this challenge, it is a particularly concerning that we are already receiving reports of some skill shortages as well as capacity constraints for some building materials such as bricks.”
By Home Maker