Derrick McFarland, Managing Director Keystone Lintels is BMBI’s Expert for Steel Lintels.
As reported last quarter, quarter two 2019 started strongly, with April and May in line with market predictions. However, June ended all hope for the quarter. Whilst the quarter overall was slightly up on the previous year, June’s performance has set alarm bells ringing. Q3 has started firm to flat and if, as with the last few years, September does not perform, Q3 may not see growth overall.
The NHBC (National House-Building Council) Q2 report has registrations around 39,000, down 3% on 2018. When combined with the small increase in Q1, year-on-year registrations for the half year are flat when compared to 2018. So what’s the outlook?
Political uncertainty, recent local elections and their influence on local housing plans, prime ministerial elections and the Brexit debate throw down a challenge to medium-term house building strategies. Depending on location, UK house price inflation is moderating and the outcome of Brexit will inevitably further influence the economy and housing market. The government’s support for housebuilding is still an opportunity for the industry, with the ‘Help to Buy’ scheme extended to 2023, offering added confidence for first-time buyers.
House sales remain fairly buoyant, reflecting the demand for houses. Ease of borrowing and low mortgage rates combined with modest wage inflation and softening house prices could be a good deal for buyers. The new build market remains strong and the outlook is positive although EU labour and skills will be critical in maintaining our current build programmes.
We now have a new prime minister, and of course another new housing minister. Most importantly, the government is committed to construction – that’s the good news! How and when this will be delivered depends on what happens when parliament returns and the 31st October Brexit deadline.