The UK housing industry is continuously following the downward trend and fell 10% to 170,000 building construction last year.
According to the quarterly survey of the Royal Institute of Chartered Surveyors (RICS), the UK construction industry, which was once full with construction activities, is facing severe slowdown and putting the government’s new house construction projects at risk, as reported by Guardian.
RICS also disclosed that house building fell down 10% to 170,000 last year. Apparently, recent slowdown will negatively impact the government’s target of adding 3 Million homes by 2020. The survey identified that 1 percentage point more of surveyed acknowledged increase in workload in the initial three months of 2007. This was dramatically lower than reported in the last quarter of 2007 at +16%, and lowest since 1996.
As per the housing industry experts, private residential construction too failed to show resistance against slowdown and homebuilders reacted to challenging condition in the sector with reduction in the construction of new homes. It also highlighted the problem that the government is facing to persuade builders to build new homes at a time when the industry is in terrible situation.
In such a situation, when businesses of both private and public builders are shrinking, expectation for gains would be unfair. Moreover, amidst price fall speculations in the industry, moneylenders are finding it hard to fund their mortgage operations.
Industry experts also predicted that the UK housing industry is following the same lines which led the US housing industry towards huge downfall. This is mainly attributed to sacking of people from job in the country and around one-third of one million people lost job last year. Owing to current situation, consumer spending capacity in the UK has also gone down.
According to a Research Analyst at RNCOS, “The UK housing industry is declining continuously, with huge slump in construction of new homes due to poor financial condition in the country. The downturn is expected to worsen in coming years. Lack of finance and poor employment are collectively deepening the crisis in the UK housing market. Therefore, everything depends on the realtors to chart out new finance policies that catch eyeballs of consumers.”
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