THE increase in growth announced is a “very welcome” tonic for the housing sector, according to a leading property association.
The National Association of Property Buyers said although the 0.1% bounce was “tiny” – it provided a much-needed boost.
Spokesman Jonathan Rolande said: “This is something many, including the National Association of Property Buyers, weren’t expecting. So it is very welcome news.
“We are only talking about a tiny increase, and we need to be cautious because the economy remains in a dire state. But if future figures can stay positive we may just about keep out of recession for now at least.
“With Spring around the corner, fuel bills will start to come down as the weather and economic outlook become brighter. Those in the property business are relatively pleased with the start to the year and the widespread predictions of a house price crash feel misguided at this stage.”
Outlining two of the major challenges he believes those working across the construction side of the property sector now face, he said: “Finance is emerging as a big and ongoing challenge. Companies are beginning to find it tougher, and more expensive, to finance projects.
Demand for services
“Smaller firms will feel a similar effect as demand from homeowners for extensions and major refurbishment is diminished due to the cost of borrowing.
“Another hurdle we must yet overcome is supply. Although the problem with shortages is easing, we expect demand for certain products such as energy efficient boilers and insulation to push up prices.”
Reports last week revealed the UK economy unexpectedly grew in November, helped by a boost from the World Cup.
The economy expanded by 0.1%, helped by demand for services in the tech sector and in spite of households being squeezed by rising prices.
The Office for National Statistics (ONS) said pubs and restaurants also boosted growth as people went out to watch the football.
But it is still unclear whether soaring costs will tip the UK into recession.
Although the November reading of gross domestic product – a measure of all the activity by businesses, the government and people in the UK – was much better than anticipated, the overall picture still suggests the economy is stagnating as food and energy bills go up and people cut back.
The November increase marks a slowdown from a 0.5% rise in October, which was largely as a result of a bounce-back from businesses shuttering to mark Queen Elizabeth II’s funeral in September.
