House building market set to bounce back in 2023

The house building market is set to come back strongly in 2023 after a year when activity has been cooling down and is expected to cool further.

Despite the min-boom that followed the Covid lockdowns of 2020, 2021 saw a cooling off in house building thanks to the withdrawal of the temporary stamp duty reduction and homebuyers’ confidence being impacted by weakening household incomes, higher taxes and interest rates.

According to the latest construction forecast for 2022-24 from analyst Glenigan, that cooling off in house building looks set to accelerate during 2022 thanks to inflation and further increases in interest rates. All of which, the report say, will see activity in the house-building sector fall by 5% this year.

Private housing starts in 2021 were worth £27.7bn in 2021 and are predicted to drop 5% to £26.2bn in 2022.

The report predicts, however, that this will pick up again by 14% in 2023, hitting £29.8bn, rising again by 1% to £30.2bn in 2024.

The construction market as a whole is expected to rise by 7% in 2023 and again by 2% in 2024.

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