Growth in UK house building at its highest since 2003

The latest Markit UK Construction PMI report has stated that in July 2014, the new UK house building grew at its fastest rate for nearly 11 years, not since November 2003 has home building seen more activity, driven by the demand for new new projects and the growing demand of the first time buyers.Although the house building market is one part of the PMI index and the overall index was down slightly from 62.4 to 62.6 in June, growth in the market is indicated by anything over 50.Tim Moore, the senior economist at Markit, stated that "July's figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment highlights that construction firms are increasingly confident about the sustainability of the upturn,"The growth in the construction industry has been positive for the past 15 months and has given rise to a reported fastest rate of labour hiring since April 1997 when the survey first began.It is expected that this period of growth will have the usual knock-on effect in the home and DIY markets but this will not be reflected until later in the year.With the markets anticipating an interest rate rise sooner rather than later Ray Boulger, of the mortgage brokers John Charcol, is expecting and average 2014 house price rise of around 8%. Which is based on the Halifax and Nationwide indexes.This rise reflects a similar increase seen towards the end of 2013, and which caused a surprise due to the slow growth experienced at the start of 2013.This view is rejected by the housing market commentator Henry Pryor who predicts that although house prices will rise, the scale of the rise will be only 5% nationally in 2014, but 8% within the M25 motorway. The London market is expected remain buoyant with demand still outstripping supply.If you enjoyed this blog you can read more on our business and economy blog section.