UK housing starts indicator hits 10-year high, commercial market improves

[LONDON] A measure of house-building plans in Britain hit a 10-year high in early 2017 and demand for commercial property improved too, industry surveys showed on Thursday, easing concerns about the impact of last year's Brexit vote on the real estate market.

Registrations with the National House-Building Council (NHBC) - payments by homebuilders for insurance on projects before construction starts - rose 17 per cent compared with the first three months of 2017 to 42,470.

That marked the strongest calendar quarter since 2007.

Housing is a hot political topic as Britain gears up for a June 8 national election with both main political parties pledging to help people struggling to buy homes. Property prices have risen strongly in recent years as demand for housing outstrips supply.

The NHBC said 157,898 new homes were registered for construction in the financial year ending in March, up 4 per cent on 2015/16 but still 1,000 shy of the long-run historical average.

The housing registration figures were boosted by a recovery in London, which struggled through 2016, and by the affordable housing sector.

A separate survey from the Royal Institution of Chartered Surveyors (Rics) showed demand for commercial property, particularly in the industrial sector, picked up during the first quarter.

"Significantly, the forward-looking indicators are also proving relatively resilient although it would not be a surprise if activity slows somewhat ahead of the forthcoming general election," Simon Rubinsohn, Rics chief executive, said.

There were signs of weakness in parts of the United Kingdom facing the greatest political uncertainty.

Scotland was the only part of the UK where Rics' headline gauge of investor demand was negative, with property surveyors citing the prospect of another independence referendum as a turn-off.

And foreign investors took fright in Northern Ireland, with doubts about its future following Brexit compounded by the recent collapse of the semi-autonomous Belfast government.

Some 42 per cent of surveyors in Northern Ireland reported enquiries from businesses looking to relocate because of uncertainty about the UK's future relationship with the EU, compared with 16 per cent across the UK as a whole.

REUTERS