House building sector could be hit by political uncertainty

There could be a fall in house building levels from next year as a consequence of political uncertainty which could cause a lagged effect, according to the Construction Products Association (CPA). The CPA this week announced that construction output is set to increase by 5.5 per cent this year, but will slow to 4 per cent in 2016 and 3.4 per cent in 2017, due to uncertainty relating to Government policies, such as Help to Buy. The lag between construction contracts and work on the ground means that construction activity in 2015 probably will not be impacted by the election until next year, since the majority of work for the year has already been planned. “Construction output is forecast to increase 5.5% in 2015, which is more than double the rate of growth for the UK economy, due to growth in the three key sectors of construction; private housing, commercial and infrastructure,” said Dr Noble Francis, Economics Director. “Over the following two years, however, construction output is forecast to be adversely affected by the UK’s most uncertain election in more than 40 years.” Although fewer homes are being developed than the country requires annually, private house building growth is forecast…