Featured Sector: Social Housing

Underlying value of construction projects starting on site. (Excludes individual projects of more than £100 million and framework agreements).

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The 2008 Pre-Budget report set in motion a number of large increases in funding for social housing, which have buoyed construction starts for the last three years. Not only was this extra funding aimed at providing extra affordable housing, it was also meant to prop up a struggling construction industry in the face of the recession. As such, the underlying value of project starts during 2010 was 30% higher than the level seen during 2007.

However, since last summer, the trend has turned, and social housing now has one of the bleakest outlooks of any sector. As part of the governments austere spending reductions aimed at reducing the deficit in public finances, the Department for Communities and Local Government’s budget has been slashed. In particular, large reductions in planned capital spending over the next four years will severely impact construction prospects for the foreseeable future.

After the 8% increase in the underlying value of project starts in 2010, Glenigan expects significant falls over this year and 2012; a 5% reduction in 2011 followed by a 34% fall the year after.