Decline on house building market

The house building market experienced a steep decline in activity in September, as reported by the Purchasing Managers’ Index (PMI).

The Markit/CIPS UK Manufacturing PMI, which is thought to be healthy when above 50, showed activity in the residential construction sector reaching the point of 45.4.

The growth tendency came to an end, as the Index reached its record low since July 2009.

The decline can be explained by a lack of confidence in the housing market, brought about by an oversupply of properties for sale, a small number of new buyers, and proposals from the FSA which are expected to impose more restrictions on new mortgage lending.

Figures from Nationwide show that the value of the typical home increased by 0.1 per cent in September and constitutes £166,757.

Still, the movement led to the annual rate of gain slumping to 3.1 per cent, compared to 3.9 per cent in August and 6.6 per cent in July.

 


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