RICS Economic Report (Housing and Construction) – February 2014
Following are some of the highlights from the economic, commercial, housing and construction aspects of the RICS report in February 2014.
The first estimate of Q4 GDP revealed growth of 0.7% over the quarter, and 1.9% for the whole of 2013. However, output still remains 1.3% below Q1 of 2008 peak. The services sector contributed the vast majority of growth in Q4.
The RICS Housing Market Survey showed demand growing at a faster pace than supply, driving further increases in house prices.
The major house price indices show growth in the region of 5 – 7.5% over 2013 with London leading other regions. This demand is supported by the following.
- Lower mortgage rates
- Easier credit conditions
- Rise in consumer confidence
- Policy actions such as the Help to Buy schemes which has provided mortgages for around 12.8K new build houses in 2013
The RICS Construction Market Survey showed that workloads grew in Q4 with private residential and commercial sectors driving activity.
The survey indicated that business confidence has picked up and activity is to expand in the next 12 months. Among factors limiting building activity, financial constraints remain the main impediment for higher growth.
The Q4 RICS Commercial Market Survey showed occupier demand continued to increase and this trend was met with a drop in available spaces. Tight market conditions pushed the RICS rent expectations series to its highest levels in over 13 years. At the sector level, the retail space increased at a record pace driven by the pick up in consumer spending in recent quarters.
In the Investment Market conditions continue to improve with enquiries increasing for the fifth consecutive quarter. The IPD all property capital growth index recorded a growth of 3.8% over 2013, and even the retail sector where price momentum had been lagging contained mild growth over the year. Overseas and institutional investors remain the main purchases of UK commercial property with central office sector seeing more substantial activity than any other sector over the second half of 2013.
Source: The RICS UK Economy & Property Market Chart Book for Feb 2014
The RICS report can be found here: