ROOF Blog

Construction activity fell in December for the 22nd month in a row as a surge in housing was offset by a sharp decline in commercial building. The construction purchasing managers’ index, where any level below 50 signals a drop in business activity, rose slightly to 47.1 from 47 last month. ‘December was another disappointing month for the UK construction sector. Unlike other parts of the economy, it seems unable to escape the shackles of the recession,’ said David Noble, chief executive of the Chartered Institute for Purchasing and Supply. ‘Purchasing managers painted a bleak picture as firms suffered from reduced client demand and falls in new business.’

Mortgage lending fell by 10 per cent during November as the market suffered its traditional seasonal slowdown, figures showed today. A total of £12bn was advanced during the month, down from £13.3bn in October and 14 per cent less than in November last year, according to the Council of Mortgage Lenders (CML). The group said a modest decline was typically seen between October and November, although the 10 per cent fall was ‘a little larger’ than normal. But it added that market conditions were holding steady and it did not expect much change during the coming months. The CML’s economist, Paul Samter, said: ‘There could be a modest decline in underlying house buying activity in early 2010 due to the stamp duty holiday ending, with activity ‘bunching’ over the last few months of 2009.’

In the build-up to the pre-Budget report this Wednesday, Pricewaterhouse Coopers (PWC) says the typical British family already faces a decline of 2.4 per cent, or £300 a year, in its discretionary spending power, after tax, mortgages, food and other essentials.

The best-off will see their spending power cut by as much as nine per cent, almost £5,000 a year, the most vicious assault on their living standards in three decades.

The impact of swingeing income tax and national insurance hikes, VAT increases, expected moves back to more normal mortgage rates and higher petrol and transport costs, thanks to the latest boom in world oil prices, will all conspire to devastate the household budgets of the better-off.

The unexpected ‘mini-boom’ in house prices continued in September, according to the latest official figures, but analysts say that a slowdown in the pace of the recent rebound has begun.

Figures from the Land Registry showed a rise of 0.9 per cent in prices last month, taking the price of the average house in England and Wales to £158,377 and bringing the annual decline to 5.6 per cent.

However, estate agents have said that transaction levels remain low and have sunk further in the first few weeks of October as homebuyers and sellers begin to hunker down in the run-up to Christmas.

Rightmove reported that the number of new listings had fallen to 94,629 in October from 105,924 in September, and the Royal Institution of Chartered Surveyors reported slight softening in demand last month.