14 COMMENT


Patrick Mooney Housing Consultant


Confl icting messages point to a slow recovery in the market


With a mixed picture of busy sites and stalled projects, Patrick Mooney sees an uneven slow recovery in the housing market, which still faces several obstacles.


C


hallenging housebuilding conditions are forecast to continue through the second half of the year, despite the Government’s pro-growth agenda, along with stretching targets for new homes and development friendly revisions made to the national planning framework. However, greater fl exibility in the mortgage markets is expected to tip the balance in favour of higher demand from buyers leading to more confi dence among builders. Confl icting evidence on how different aspects of the housing market are performing was reported over the summer with data from highly reputable forecasters at Glenigan, Savills and S&P Global all appearing to point in different directions. This is not unusual where a market is in fl ux as it attempts to transition from stagnation into one which is driving growth, with the outcome still in the balance.


SAVILLS REPORTED THAT TOTAL HOUSE COMPLETIONS REMAINED BROADLY STABLE


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While visiting a number of construction sites in the West of England in recent months, I saw these contradictory drivers being played out on an almost daily basis – at some sites labour and materials were in short supply and restricting progress, while at others there was a hive of activity on display as the workforce battled to meet tight deadlines. No two sites were showing the same signs of effi ciency or stress, which made it diffi cult to draw any conclusions.


SLOW BUT STEADY PROGRESS Sector optimism was boosted in the three months to uly 05, with the lenigan Index recording a 9% rise in project starts both compared to the preceding quarter and to the same period in 2024. While the pace of recovery had slowed from the sharp gains seen earlier in the year, activity levels remained on an upward path. Residential construction was the standout performer, with starts up 10% on the previous quarter and 25% higher than


a year ago. This growth was almost entirely driven by private market housing for sale, which rose 24% quarter on quarter and an impressive 40% year on year. The only downside came from social housing, which saw a sharp reversal, falling 33% compared with the previous quarter and 24% annually. The social housing sector is not expected to be fi lling the gap in building targets any time soon despite the huge additional money promised through the spending review. The largest housing associations have been diverting investment from new build programmes into their existing stock to make safety and energy performance improvements, mostly in response to legal and regulatory changes. In addition there is still a reluctance to buy up homes developed through Section 106 agreements, due to a perceived lower standard in their build and amenities. Figures released by the National House Building Council, the UK’s largest provider of new home warranties and insurance, showed that 30,405 new homes were registered to be built in Q2 of 2025, up 4% on a year ago and 4% more than Q1. Steve Wood, CEO at the NHBC said: “There has been modest growth in house building registrations in Q2 compared to last year, signalling an uplift in confi dence from developers, especially in low- rise housing. While some areas of the market remain subdued, we remain optimistic about the longer-term as planning and land restraints are increasingly unblocked, mortgage rates ease and the Government sustains a focus on new home delivery.”


Meanwhile, in their Housing Supply Update issued in August, Savills reported that total house completions remained broadly stable, at just over 201,000 in the previous 12 months. But the outlook for the next 1 months was seen as much more positive due to a big recovery in new home starts fi gures, which in the year to June were 40% higher than for the


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