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Builders Boosted by Government Schemes

According to a recent economic report, the United Kingdom's construction sector has enjoyed its biggest surge in business since before the global financial downturn began. The largest contributor to this welcome upturn in fortunes for the construction industry has been the house building sector.

Fastest rise in a decade
Across the country, the building of new homes has grown at such a pace that, during the month of November, the sector grew at its fastest pace for more than a decade. The report, compiled by Markit/CIPS UK Construction PMI, revealed that the current PMI level of 62.6 was the highest since August 2007.

From a figure of 28,000 at the end of last year, new home starts are currently between 40,000 and 45,000 approximately. Add to this the fact that job creation within the sector is at a six-year high and the future certainly looks healthy for the construction industry in general.

Much of the increase in demand for new domestic property has been attributed to the government's recent Help to Buy scheme which helps out potential buyers who are struggling to find the funds to put together a deposit.
Although separate schemes are run in England, Scotland and Wales, they all have the common goal of helping more people to afford new homes. In England for example, equity loans are available for buyers which help to lower the amount needed on a mortgage. No loans fees are payable for the first five years after moving into the home.
 
Other schemes under the Help to Buy banner include shared ownership with a housing association, mortgage guarantees which let buyers pay a deposit of just 5% and, perhaps of most importance to the construction industry, the NewBuy scheme. NewBuy allows potential home-owners to put down just a 5% deposit on a brand new build or a property that is being sold for the very first time.

Despite a recent survey reporting that a third of first-time buyers are confused by the Help to Buy scheme, the housing market is continuing to flourish and many more mortgage lenders are continuing to sign up to the scheme too, the latest being Virgin.

A general rise in confidence
In addition to the Help to Buy scheme, other contributing factors to the resurgence in the country's construction industry include improving credit conditions and a general rise in confidence as regards the future financial outlook in Britain. The rise in first-time buyers has been a huge boost for home builders, with many new builds scheduled for 2014 already having buyers in place.

Despite the quite dramatic rise in new homes being built, some critics of the Help to Buy scheme point out the fact that the housing market is still recovering from some fairly deep lows which may flatter the current figures and is still some way off its pre-recession peak.

Others are fearful that the Help to Buy scheme may well create a housing bubble with many homes simply becoming unaffordable to the average buyer.

However, despite these concerns, the fact remains that the UK construction industry, in particular the house building sector, is in a healthier position currently than since before the economic crisis began to take hold.
The future looks bright

As regards the immediate future, there is certainly a great deal of optimism among construction firms at this current time. The key factors for more growth are a housing market which remains lively without peaking too soon and a continued economic growth in general. It seems that the country is now finally back on an even economic keel. Anderselite are delighted that the future for the construction industry is looking so bright.
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