- Howard Archer, chief UK and European economist at IHS Global Insight
A revival in house building helped to offset a drop in construction output, suggesting measures introduced by the government are boosting investors' confidence and willingness to borrow money to build a new homes. Construction output fell 1.1% compared with April a year ago, posting the slowest fall since November 2011, while construction of new residential homes surged 3.6% over the same period, survey compiled by the Office for National Statistics showed. Recent figures support evidence of an improvement in house building, benefitting from government initiative and improving interest from home buyers.
A key data published by Markit/CIPS, which monitors activity in construction sector, showed the first gain in construction output for seven months in May, as house building work increased at the fastest pace in more than two years. The new Help to Buy package of loans and guarantees introduced by the Chancellor George Osborne, are likely to boost buyers' confidence further. Another sign of a pick-up in the property market is that home prices in England and Wales soared the record-high in May, spurred by government schemes. The U.K. economy expanded at stronger than expected pace of 0.3% in the first quarter, and the latest data and surveys are adding to further evidence the recovery is continuing.
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