The last few years have been tough on the UK property and constructions markets. Not too long ago we were reporting that more than 5,000 construction companies had gone bust between January 2010 and January 2012, but recent news shows that things are looking up for the UK.
Across the pond, the USA housing market is recovering strongly at last. The New York Times recently reported that permits for home builders had reached their highest levels since October 2008, at 717,000 units annually. Market experts are predicting that home building will add to economic growth in the USA for the first time since 2005.
Of course, the UK economy is strongly linked to the success of the United States, and their growth should help cultivate confidence in the UK. The effects are already being felt and were reflected in the recent successes of JCB.
The bright yellow plant group unveiled a 51% surge in profits during last year, with global sales up by a third and record profits of £355 million before tax from a revenue of £2.75 billion. The success of a group so important to the groundworks of new developments likely reflects an underlying increase in development starts in the UK and is a promising return to form for one of British engineering’s giants.
Rightmove inspired further confidence in the markets on 16th April by releasing figures that indicate an increase in seller confidence and buyer activity. Average property prices rose to £243,737, above the previous peak reached in May 2008 at £242,410.
The public reaction has been good, with some 39% of those questioned by Halifax’s Property Market confidence tracker believing that house prices will generally rise over the next year, relative to just 20% who believed they would fall (the lowest for seven quarters). Greater confidence, of course, will generate greater investment and the same company revealed that first time buyer levels were up in both Wales and London with 22.3% and 42% respectively.
Although the bank of England base rate has not changed, mortgage interest rates are slowly creeping up. This may have been as a consequence of an increase in demand as reported by the Mortgage Advice Bureau, which states that demand has risen 5% in March relative to a year earlier.
This is tied in with a surge in buyer activity reported during March by the RICS and propertysurveying.co.uk. The RICS stated that 9% more surveyors reported a rise in inquiries from potential buyers and propertysurveying.co.uk noted a marked increase in telephone enquiries over the period.
The indications are that things are picking up and perhaps 2012 will be an improved year for the construction and property survivors.