Featured Region: London – April 2014

2013 saw the Capital race ahead of the rest of the UK in terms of house prices and commercial demand, Glenigan’s data on project starts also shows construction activity undergoing rapid growth, with a 19% rise in underlying project starts taking this measure to a third higher than 2007 levels.

Recent years have seen high levels of construction activity in the greater London area, the region has benefitted from gains across a number of sectors that pushed underlying starts in 2010 well above pre-recession levels. Surging population levels have meant the region’s private housing sector has gained in each of the past three years and starts of infrastructure projects surged in 2011 as the capital geared up for the 2012 Olympic games. Strong levels of infrastructure investment have continued due to further investment into railway capacity. The gains in UK office starts seen during 2012 and 2013 were also heavily concentrated in the capital, driven to a large extent by foreign investors buying into what is seen as a safe long term investment in London office property.

The value of project starts fell slightly in 2012, predominantly due to falls in the civils and education sectors, and output in the region began to fall from the third quarter of 2012 until the second quarter of 2013, according to The Office for National Statistics. However the most recent regional output statistics show growth resuming in the third quarter of 2013, and the continued rises in project starts will push this higher during 2014.