Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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April 5, 2024

Economy – House prices dip in March, Halifax; Construction returns to growth (just), CIPS | Fortnight ahead

Economic data

House prices. UK house prices fell by 1.0% in March, seasonally adjusted, to £497k, following five consecutive rises, according to the Halifax House Price Index. The Y/Y rate fell to +0.3%, from +1.6% in February and a recent peak of +2.3% in January and low of -4.5% in September 2023 (with the 2022 comparative being immediately ahead of the mini-budget). Northern Ireland registered the largest Y/Y rise, +4.3%; Wales, +1.9%; Scotland, +2.1%. In England, the North West saw the strongest growth, +3.7%; Eastern England the biggest decline of -0.9%. Prices in London increased by 0.4% (a similar picture of partial recovery was recorded by Nationwide). Next release, 7 May.

Viewpoint: There was also a small M/M decline, 0.2%, recorded by the Nationwide, possibly reflecting a very recent uptick in fixed-rate mortgage rates, following steady declines since July, but latest more dovish signals on Bank of England rate setting intentions, may prompt a return to a return to reduction in mortgage lending.

Construction activity. UK construction companies reported a return to growth, albeit modest, in activity during March, following six months of decline, highlighted in the latest  S&P Global UK Construction PMI report. The headline seasonally-adjusted Purchasing Managers’ Index rose from 49.7 in February to 50.2 –  above 50.0 no change index (% of respondents reporting rises minus those recording falls). Survey respondents indicated a turnaround in sales pipelines and new business enquiries. New orders expanded at the fastest pace since May 2023. However, companies remained cautious about staff hiring, with employment numbers falling for the third month running in March. Civil engineering was marginally the best-performing segment in March, with respondents citing increased work on infrastructure projects and resilient demand in the energy sector. However, house building and commercial construction activity were similarly broadly unchanged in March; the stabilisation in residential work represented the best performance for this category since November 2022.

Fortnight ahead

05 Apr 24 – Fortnight ahead
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