Kenilworth, United Kingdom, April 03, 2008 --(PR.com
)-- The Construction Centre released a statement in response to the report saying that the industry has until now remained relatively buoyant but with skills shortages and other economic factors such as the credit crunch; the housing market would undoubtedly suffer.
The announcement that workloads fell to below figures released in 1996 with 1 per cent more surveyors reporting a rise than a fall, down from 16 percent in the last quarter of 2007.
The net effect of this downturn, The Construction Centre said would put the government's target of 3 million homes by 2020 at risk. The Construction Centre had already reported on the skills shortage and housing deficit prior to the release of the announcement today and highlighted its concern that the industry, which has supported the UK economy, may continue to see a downward turn.
Despite the government’s emphasis on housing, it is the private market which has suffered in terms of housing with demand and profit margins reducing and confidence in the lending market at an all time low.
RICS senior economist, David Stubbs said “Growth in the construction industry has slowed abruptly in the first quarter of this year. Private residential workloads are now shrinking as home builders react to challenging conditions in the housing market by reducing the number of new homes under construction. This emphasises the difficulty that the Government will have in encouraging higher house building levels during periods when the housing market is softening.”
The Construction Centre warned that the downturn in both the construction and demand for new housing could continue to affect the market alongside lending issues and ultimately force the government to re-address its already ambitious plans. Richard Simmons, Managing Directory at The Construction Centre said “Confidence in the market for house builders is at an all time low, the industry is being squeezed from every angle, in terms of regulations, profit margins and labour. The amount of new build homes are not increasing year on year with only 160,000 new homes built last year and the need for around 240,000 to be built each year, there is already a huge deficit.
He continued “The government has laid out its plans for 3 million homes by 2020, but unless confidence is regained and builders know where they stand, this figure is simply a pipedream.”
The Construction Centre stated that although the demand for housing was most notably reduced in the North, the RICS report confirmed a weakening in most regions across the UK and was static in London, the South East, Midlands, Wales and Northern Ireland.
In conclusion The Construction Centre said it expected the trend to continue throughout the second and third quarters of 2008 and that the government may need to re-evaluate its plans for new homes over the next 12 months.
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