UK house builders show caution as Brexit approaches: industry body

[LONDON] British construction firms are making a cautious start to 2019 after slowing their house-building plans late last year in the face of Brexit uncertainty, an industry body said on Thursday.

Builders registered plans to build 40,513 new homes between October and December across the United Kingdom, up 2 per cent from the same period in 2017, the National House-Building Council (NHBC) said.

That contrasted with 15 per cent growth in the third quarter, although that surge was boosted by catch-up work after wintry weather in early 2018.

The slower pace of activity in late 2018 continued into January. "We are still seeing growth coming through," NHBC chief executive Steve Wood said. "At this stage, it's a similar picture to the fourth quarter. It's steady."

NHBC housing starts in England dropped by 1.1 per cent in 2018 to 137,150 - suggesting that the industry as a whole was only constructing just over half the 300,000 homes a year which the government wants by the mid-2020s to reduce England's housing shortage.

Registrations in London, once the engine of home-building in Britain, were down by 10 per cent in 2018, reflecting the Brexit uncertainty in the city which is home to many people from other European Union countries and to Britain's huge finance industry.

"Of course that saga continues. Who knows where brinkmanship will take us," Mr Wood said. "Clearly we are going to be in a slightly choppy period for some months as Brexit develops."

Prime Minister Theresa May says she wants more concessions from her fellow EU leaders, raising the prospect of an economically damaging no-deal Brexit on March 29.

Estate agency Savills predicts house prices in London will rise by 4.5 per cent in total over the next five years, slower than other regions. Prices in north-west England and in Yorkshire and Humberside were seen up about 20 per cent.

Those forecasts were based on the assumption that Britain avoids an economically damaging no-deal Brexit.

Last week, mortgage lender Nationwide Building Society said annual house price growth slowed to just 0.1 per cent in January, the weakest in nearly six years.

The NHBC home building registration figures also showed a rosier picture in many regions than in London rose, including a 20 per cent increase in Yorkshire and Humberside.

The NHBC data covers around 80 per cent of new homes built in the United Kingdom.

REUTERS