Figures show that the amount of money spent on house building in the three months to the end of July fell by £1 billion, to £1.4 billion. This compares to the £2.5 billion spent in the three months before the election.
The figures have come from the Glenigan Index, which tracks the activity within the construction sector. The index recorded a moderate increase in housing construction at the beginning of the year, boosted by house price increases and demand for homebuyers.
There was also a sense of economic recovery, which led many developers to start projects that they may have had on the back-burner during the darkest days of the recession. However, since the election, the Coalition Government’s austerity measures have sparked new concerns about a double-dip recession.
The downturn is illustrated by the Index’s figures showing that projects valued between £250,000 and £100 million were down by 22 per cent on the same time a year ago. This has highlighted the “fragility of the recovery”, according to Glenigan economist James Abraham.
Despite this, Taylor Wimpey’s boss, Pete Redfern, recently said that the house building market was “a lot more robust than people on the outside are seeing”.