Following the Brexit vote in the UK, construction is one of the various industries which has been up in the air.
UK residential market
The Mid Group has found that strong underlying demand for houses has maintained the strength of the UK construction industry as a whole, with strong demand for new, starter homes.
In the mainstream markets and traditional home buying areas, such as the home counties, there appears to have been little to no impact whatsoever from Brexit and other events of this year so far.
There has long been a supply-demand problem in the UK housing market and that doesn’t appear to have eased in the current uncertainty – the market is still not delivering enough new homes, so it is business as usual for the residential market.
Building in London
London has the highest volume of demand for houses, and the Mid Group has seen that some local authorities around the area have begun building homes for the first time in around three decades.
From the Mid Group’s experience on projects with Local Authorities, such as the London Borough of Lewisham, we are seeing growing demand for high quality, new affordable homes. The use of off-site construction is one of delivering high quality new homes.
Mid Group’s chairman and CEO Sahel Majali said: “In respect of high-end residential, projects appear to be slowing down, or going on hold, particularly where they may have been marginal in the first instance. However, good quality projects do still appear to be moving forward.
“In other markets, the Government still seems to be spending on schools, roads and other infrastructure. This is keeping many of the main contractors busy, such that any slowdown in Government spending could cause a shock in the market.
The UK government is expected to sign the contract with French utility giant EDF for the Hinkley Point project imminently, something Sahel believes should ease the strain on the industry.
“With Hinkley Point finally getting the go ahead, this will create a general stress on UK construction, potentially pushing up pricing, particularly in the South West of England.
“There are many reasons to remain optimistic, with those projects that are currently going ahead of a better quality and strong fundamental economics. Major infrastructure projects are creating sustainable demand, which should finally see large construction companies invest in innovation and people.”
About the Mid Group
Mid Contracting and Consulting is the UK trading business of the Mid Group, focused on the delivery of new projects using the best in off-site construction methods and modern technology.
The Mid Group is a dynamic construction, investment and development company, dedicated to providing enhanced value for clients and partners across the UK and Middle East through innovation and professionalism.
For more information visit the Mid Group site.