2016 Market Forecast: ‘The level of mortgage completions will be at their highest since the last boom’
Find out what’s hot and what’s not in Gleeds’ series of snapshot market forecasts. We’ve handpicked five of our finest directors to share their property and construction predictions for 2016, every day this week.
To kick-start our market forecasts Gleeds director, Graham Harle, shares his thoughts on housing and China.
What is your top construction prediction for 2016?
I think the residential sector will lead the way in construction activity this year, and house prices will continue to grow at between 5% and 7% across the UK. I see this sector growing significantly, especially outside of London, and the level of mortgage completions being at their highest since the last boom, especially with the likely increase in interest rates this year. The top end residential market in London, especially the speculative market, will fall however due to economic slowdowns in China and Russia and political unrest in the Middle East.
Do you anticipate any big ticket announcements?
Following the announcement of Chinese investment in the next generation of UK nuclear power, with Hinkley Point plant at the forefront of this plan, I do expect Chinese companies to continue to invest in large UK infrastructure projects and acquire major UK/European construction business.
What do you see as the biggest barrier or challenge for UK construction this year?
The lack of resources across the construction industry, both in terms of labour and material shortages, is the major risk to the industry at the moment. This is causing problems with tender prices and inflation at present, which has caused projects to go on hold due to viability issues, and I expect this to still be an issue in 2016.