In October 2024, data on residential permits and private housing starts showed some declines compared to previous months. This decline reflects shifts in the UK housing market, which has been affected by a number of economic and social factors.
Building Permits for October 2024
Building permits in October were 1,416,000 housing units, a 0.6% decrease from the revised September rate of 1,425,000 units. This figure also recorded a significant decrease of 7.7% from the October 2023 rate of 1,534,000 units. This decline in permits reflects the many challenges currently facing the construction sector.
On the other hand, building permits for single-family residential units (which include detached homes) saw a slight increase of 0.5%, with the rate in October reaching 968,000 units, compared to 963,000 units in September. This indicates relative stability in demand for single-family homes.
As for residential units in multi-storey buildings (five or more units), the rate of permits in October was 393,000 units, indicating continued demand for residential units in large residential complexes.
Housing starts in October 2024
As for housing starts in October 2024, they declined significantly. The rate of construction starts reached 1,311,000 units, which is 3.1% lower than the September estimate of 1,353,000 units. Compared to October 2023, the decline was more pronounced, with the numbers recording a decrease of 4.0%.
The decline in construction starts rates is among the indicators that may reflect a slowdown in the housing market. It is clear that some developers may be reluctant to embark on new projects due to economic challenges, such as high construction costs and limited availability of raw materials.
in addition to high interest rates that may limit the ability of individuals and companies to finance real estate projects.
Housing completion in October 2024
For single-family homes, the numbers fell even more. Starts were at 970,000 units, down 6.9% from September’s 1,042,000. Meanwhile, buildings with five or more units saw a smaller decline, with starts at 326,000.
October 2024 Housing Completions
As for housing completions, the UK market has seen an improvement in this area compared to the decline in permits and building starts. In October 2024, house completions were at 1,614,000 units, down 4.4% from September’s 1,688,000 units. Despite the decline, the October figure was 16.8% higher than the same month last year, at 1,382,000 units. This improvement in completions suggests that many projects that had been stalled or delayed due to supply chain or financing issues have finally reached completion. It also reflects the ability of some construction companies to adapt to the economic and social crises, despite the challenges facing the sector.
Future trends in the construction sector
The data presented points to some important trends that could shape the future of the UK housing market. The decline in permits and construction starts is putting further pressure on the sector, especially with factors such as rising interest rates, which are limiting the ability to finance projects. Furthermore, demand for single-family homes remains relatively stable, but there has been a marked decline in demand for multi-storey housing.
This trend is expected to continue in the coming months, as the construction industry may face further challenges due to global economic volatility. However, new opportunities in the housing market may emerge in the near future, particularly if interest rates start to fall.
which could encourage new projects and stimulate activity in the real estate sector.
The market continues to show signs of recovery
The UK construction market appears to be in a transitional phase at present, with a marked decline in building permits and starts.
while the completion sector continues to show some progress. It is important that the government continues to support the construction sector through fiscal and monetary policies that can help stimulate growth. Despite the economic challenges.
the market continues to show signs of recovery.
but concrete action is needed to support the stability of this vital sector of the economy.
When interpreting changes to the statistics in this release, note that monthly changes to seasonally adjusted statistics often show movements that can be irregular. It can take three months to determine the underlying trend for building permits, six months for total starts.
and six months for total completions. The statistics in Table 1 in this release are based on a non-probability sample and are not subject to sampling error.
However, they are still subject to non-sampling error. The overall quantitative response rate for these estimates is 76.2%. Statistics in Tables 2-5 in this release are estimated from sample surveys and are subject to sample variance as well as non-sampling error including bias and variance from response, underreporting, and under-coverage. Estimated relative standard errors for the most recent data are shown in the tables.
All ranges given for relative changes are 90 percent confidence intervals and represent only the sample variance. If the range does not contain zero, the change is statistically significant. If it does contain zero, the change is not statistically significant; that is, it is uncertain whether there is an increase or decrease. The same policies apply to confidence intervals for relative changes. On average, the seasonally adjusted preliminary estimates of total building permits, housing starts.
and housing completions are revised downward by 2.2 percent or less.
