Private housing springs to life as market confidence grows

After a strong start to the new year, private housebuilding is shaping up to become one of the most promising sectors for new construction work in 2025.

Encouraged by the prospect that rising real wages and lower mortgage rates should provide a boost to new homes sales as the year progresses, private housebuilders have been opening new sites and starting work on more units.

The latest Glenigan Index shows that in the three months to the end of January, private housing project-starts rose by 31% on the previous quarter and were up 26% on the same period a year earlier.

The upturn in activity in the sector is in keeping with the recent Glenigan Construction Forecast 2025-2026. After two years of dwindling activity, it predicts a 13% rise in the value of underlying private housing starts (under £100 million) this year, followed by a further 15% growth in starts in 2026.

Property professionals are also increasingly confident that better times lie ahead for the housing market. The January RICS UK residential property market survey showed that a net balance of +10% of agents responding were positive on the outlook for house sales three months ahead. Looking 12 months ahead, a net balance of +30% were positive on prospects.

Meanwhile, the volume of all house sales agreed in January was 15% higher in January than its recent trend and demand was 8% higher, according to Rightmove, the property search site.

Brighter outlook

The brighter outlook for the sector is reflected in messages from the larger quoted housebuilders. Earlier this month, Barratt Redrow reported a solid start to the new year. In the five weeks up to the first week of February, the group’s private homes order book rose by 11.2% on the period a year earlier to 6,126 units.

Barratt Redrow chief executive David Thomas said that whilst the outturn for its full year (ending next June) depended on the Spring selling season, its forward sold position and ‘encouraging’ reservation activity pointed to the company completing between 16,800 to 17,200 homes.

One significant scheme where the company is due to start this work this summer is a £36.9 million project of 280 houses at New Lane in Huntingdon, near York. Barratt Homes Yorkshire East has had reserved matters granted on the scheme which includes landscaping and infrastructure on a near-12-hectare site where work is set to run for 20 months (Project ID: 21112670).

Stronger sales

Fellow-volume housebuilder Bellway is also seeing stronger sales which bodes well for the scale of its current building programme. In a recent trading update, the company said its forward order book stood at 4,726 homes as of the end of January, up from 3,970 at the same stage last year.

Bellway group chief executive Jason Honeyman, said: “While mortgage interest rates have increased modestly since the autumn, customer demand has remained robust, and the group has a healthy order book to support our targeted growth in volume output for the full year.” Bellway is on track to build at least 8,500 homes in the year ending next July, up from 7,654 homes in the previous year.

Detailed plans have been granted, and work is set to start in the coming weeks on a £27.9 million Bellway Homes (Wessex) scheme of 86 homes at Salisbury in Wiltshire. Work on the new homes, which come with garages, car barns and refuse/cycle stores, is set to run for 30 months (Project ID: 19204973).

Glenigan data provides details on other types of private housing developments where construction is set to get underway in coming months and which provide new work opportunities.

One major inner city private housing development which fits with the government’s ambition for more development around railway stations is the £60 million Nine Elms Over Station Development in south London (pictured). Detailed plans have been granted for Connected Living London’s scheme of 479 flats with commercial units with work set to start this spring and run for 14 months (Project ID: 15375092).