Positive outlook for private housing

Whilst Glenigan has tracked a cooling in the value of private housing projects starting on site in recent months, Glenigan data also reveals that the development pipeline remains firm. This suggests that the current dip in new starts may be short-lived as developers are well placed to bring forward additional sites in response to any strengthening in market demand. Indeed the drop in project starts since November may be partially a natural retrenchment following the high level of project starts last summer with housebuilders focused on building out these earlier sites. The value of project starts totaled £3,250 million during the three months to February. This is 12% lower than during the preceding three months (on a seasonally adjusted basis) and 6% lower than a year ago. In contrast, the value of projects securing detailed planning approval during the three months to February was only slightly down (3%) on the preceding three months and was still 10% higher than a year ago. The strength of the wider housing market will be crucial to the early conversion of these approvals into work on site. Encouragingly recent house price and property transaction data indicates that activity remains firm in the general housing market. Whilst the flow of new mortgage approvals was distorted during the first half of 2016 by the increase in stamp duty rates for buy to let purchases, the number of loans approved for house purchases subsequently edged higher over the winter months. Furthermore, although the British Bankers Association (BBA) report that, at 42,613, the number of house purchase approvals slipped back slightly in February from the higher levels seen in December and January, they remained above the 2016 monthly average of 41,287. House prices have also firmed up over the winter months after a stalling in house price rises last autumn. The Halifax recorded a 1.7% rise in average house prices during the three months to February against the previous three months, with average prices 4.1% higher than a year ago.