Industry output fell back in May

Industry output fell back in May

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Construction industry output fell by 1.1% in May 2014 but remains around 3.5% higher than in May 2013, according to latest official estimates.

Having increased by 1.2% in April, output dropped back again the following month, latest data from the Office for National Statistics reveal. Both new work and repair & maintenance fell by 1.1% in May 2014.

Compared with May 2013, output in the construction industry increased by 3.5%. Year-on-year all new work and repair & maintenance both increased by 3.7% and 3.1% respectively.

The main driver of this recent growth is housing construction which has increased by 19.4%.

There were notable year-on-year falls in infrastructure, public other new work and private commercial.

Housing new work provided the largest contribution to the increase in all new work compared with May 2013, with both public and private housing seeing substantial increases of 29.3% and 16.8% respectively. This resulted in all new housing increasing by 19.4%. Private industrial new work also increased compared with 2013.

While output has fluctuated from month to month, the industry has now seen year-on-year growth for 12 consecutive months

Month-on-month, the fall in construction output in May was driven mainly by private commercial work which fell by 3.6%, and repair & maintenance which fell by 1.1%. New housing output, which includes both public and private housing, increased for the third consecutive month, experiencing growth of 1.1% driven entirely by the public housing component.

 

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Commenting on the data, Turner & Townsend UK managing director Steve McGuckin said: "The surprise reversal of April's growth comes as a timely reality check for the construction industry. Order books and levels of confidence are both strong, but despite the great progress made in the past year, no-one should take the momentum for granted.

"Month-on-month figures are notoriously volatile and should be taken with a healthy pinch of salt; but the sustained fall in infrastructure output – down more than 8% in a year – cannot be explained away so easily.

 "The booming residential sector has been the engine of the wider construction industry's growth, and with demand still strong it has plenty of road left to run. Even if house prices are close to peaking in the southeast, sales are robust and housebuilders are unlikely to suffer much in the short-term. Many construction firms have over two years' worth of orders on their books, and more than enough momentum to keep building.

"In fact a plateauing of house prices could be a good thing – it should reduce the inflationary pressure of off-plan speculative purchases and allow the industry to rebalance to build a wider range of properties.

 "But while sectors other than residential are showing some encouraging signs, the construction industry as a whole is still worryingly reliant on housebuilding. That leaves it exposed to the impact of inevitable interest rate rises. The construction industry is responding well to Britain's urgent need for more homes, but its growth must become more broadly based if it is to ride out any bumps on the road ahead."

 

 

 

 

 

 

More part time landlords in the UK than ever before

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The proportion of part time UK landlords who supplement their day job with rental income has reached its highest ever level according to new research.

The National Landlords Association, (NLA) says that part time landlords now make up more than 70% of the sector.

A fifth of these landlords are so encouraged by the current rental market that they intend to add to their property portfolio this year.

A typical part time landlord has on average four properties and generates an annual gross rental income of £31,000. However, a quarter of this income is spent on property or portfolio related maintenance costs.

More than four in 10 of these landlords have used buy to let finance to fund their lettings portfolio, and almost 40% of all landlords agree that it’s getting easier to access buy to let mortgages.

However, four in five landlords agree that the market would benefit from more buy to let lenders and greater competition.
The NLA has launched new guidance to support the growing number of part time or amateur landlords who are considering a new investment or planning to expand their portfolio.

‘Private landlords put an estimated £20 billion into providing homes the UK and we know that more and more people are looking to buy to let as an alternative means of saving for the future,’ said Carolyn Uphill, chairman of the NLA.

‘Being a landlord can be very rewarding but it’s vital that anyone considering a move in to buy to let, or indeed looking to expand their portfolio, is thoroughly researched and aware of what it involves. A part time landlord typically has a day job so it can be a very challenging task to keep on top of managing and maintaining homes for people whilst juggling the demands of daily life,’ she explained.

‘As the leading landlord association we have a duty to ensure that new and prospective investors identify as landlords and know they can rely on us as a source of valuable information and advice. Our new guidance does just that and will provide everything you need to consider when looking for a new investment or expanding your portfolio, as well as tips on how to run your lettings business effectively and profitably,’ she added.

UK mortgage lending data published according to post codes for the first time

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Major mortgage lenders in the UK have today published details for the first time of their total outstanding residential mortgage lending according to over 9,000 post code sectors across the country.

The data includes most buy to let lending as well as home owner lending worth around £855 billion and is compiled by the Council of Mortgage Lenders, covers Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, Santander UK, RBS, and Clydesdale and Yorkshire Bank, who together represent about 73% of the total mortgage market.

These lenders are also publishing their own lending data by postcode on an individual basis and the British Bankers' Association is simultaneously publishing a similar breakdown of SME lending and personal loans.

Out of the 10,834 sector postcodes in Great Britain data is being published on 9,030 sector postcodes. In addition, there are 1,770 sector postcodes where, according to 2011 Census results, nobody lives and there are 32 sector postcodes where people do live and where participating lenders have mortgages, but aggregate data cannot be reported because it might compromise individuals' data privacy.

There are just two sectors where people live but where participating lenders do not have mortgages. However, 2011 census data suggests that in both localities there were households with mortgages, which could well be provided by non-participating lenders.

The CML says that when interpreting these detailed figures, it is important to bear in mind that this postcode reporting exercise initially only covers lenders accounting for around three quarters of the overall mortgage market. With more than 100 active lenders, the mortgage market is fiercely competitive, and this means that local markets may display different market share characteristics.

The detailed local statistics at sector postcode level provide for the maximum transparency possible without compromising data privacy. However, interpreting them is less straightforward, especially given the significant variation in such factors as house price values, population size and tenure patterns at a local level.

So the CML is also supplying higher level postal area data covering the 120 postal areas of Great Britain. ‘On this basis, we are able to report £891 billion of mortgage lending by the participating lenders, since we are able to include some of the lending that had to be excluded for data privacy purposes from the more detailed sector breakdown, as well as some lending that could not be attributed to a specific sector postcode,’ explained CML director general Paul Smee.

‘As you would expect, strong levels of mortgage lending are broadly correlated with those areas where there is a strong resident population. While the dataset covers only three quarters of the mortgage lending market, it certainly shows that there are reassuringly few surprises in the postcode distribution of mortgage lending,’ he added.

Lenders have taken care to strike a balance between the desire for transparency and the need to protect customer confidentiality. To protect the privacy of business and personal customers, a set of parameters were agreed with the government to ensure customer confidentiality is protected…