A £4 billion boost in new housing today sparked hopes that Britain’s builders will be able to keep pace with a surge in demand for new homes and boost the wider economy.
Big rises in orders for both public and private new housing between April and June enabled overall housing orders to record their fastest growth – 19.4% – since the autumn of 2010. In volume terms the £4 billion in orders placed is the highest since the end of 2007, according to the Office for National Statistics.
More recent figures for July showed 2.2% output growth for the industry compared with June. This was higher than City expectations and raises hopes of even stronger growth for the wider economy between July and September.
More timely survey data for August showed the fastest pace of growth for the industry in nearly six years.
The data will be welcomed by Chancellor George Osborne, who has drawn fire for fuelling house-price rises through initiatives like Help to Buy while not doing enough to spur new home-building. Overall construction orders were up 19.8% quarter-on-quarter and 32.8% year-on-year between April and June, the figures showed.
IHS Global Insight’s Howard Archer said: “It is particularly encouraging that the improvement in construction activity is becoming broadly-based across sectors. Housebuilding activity is seeing particular improvement, which is welcome news given concerns that a shortage of properties risks contributing to a new housing-market bubble.”
Markit chief economist Chris Williamson added the economy is on course for growth “much faster than anticipated by the Bank of England”.