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According to Housebuilding, a new Market Report Update from market intelligence provider Key Note, UK housebuilding output amounted to £35.02bn at constant 2005 prices, representing an increase of 2.3% on the previous year.
Housebuilding output in the UK has been significantly affected by the adverse economic situation in recent years, with sharp decline throughout the market. Private sector housebuilding experienced the majority of this decline, largely due to the strict restrictions currently in place throughout the mortgage lending markets, with the majority of lenders offering relatively low loan-to-value mortgages. This, coupled with rising unemployment and inflation, and its impact on consumer spending, has significantly reduced the number of property transaction each year in the UK.
In the public sector, housebuilding output has remained relatively robust, however, recently public sector spending cuts, introduced in order to reduce the UK's budget deficit, started to affect the market, with growth (at constant 2005 prices) stagnating in 2011. Public sector housebuilding output is expected to be affected more significantly over the next few years as spending cuts become more severe.
Due to these cut-backs in public sector spending, along with the slow pace of recovery in the private sector, Key Note forecast that the UK housebuilding market is unlikely to exhibit significant growth until 2014. From 2014 onwards, with public spending returning and continuing recovery in the private sector, increasingly strong growth is forecast.
Press enquiries: Jack Sykes at Key Note at firstname.lastname@example.org or 0845 504 0452. Press/review copies of the report are available on request.