I’ve been asked by a number of clients, suppliers and consultants recently about the state of the market. There has been mixed news from various industries of late, Brexit and other events that have left many wondering what is happening in construction, writes Sahel Majali.

From what we see at the Mid Group, there still seems to be strong underlying demand for new homes, particularly in the mainstream markets. Traditional home buying areas, such as the home counties, do not appear to have had any impact whatsoever from recent events.

Furthermore, within London, there certainly seems to be strong demand for new, starter homes. The significant undersupply of stock has not gone away and the market is not delivering enough new homes.

All this means business as usual for the residential market.

New homes

Additionally to this, a number of local authorities are now starting to build homes for the first time in three decades. From the Mid Group’s experience on projects with Local Authorities, such as the London Borough of Lewisham, we are seeing growing demand for high quality, new affordable homes.

The growth of Local Authorities as a new client group is creating additional pressure on the delivery side of the market.  Here, the use of off-site construction is one of delivering high quality new homes.

In respect of high-end residential, we are seeing a slowing down, with less investment currently going into this area of the market. Projects appear to be slowing down, or going on hold, particularly where they may have been marginal in the first instance.  However, good quality projects do still appear to be moving forward.

In other markets, the Government still seems to be spending on schools, roads and other infrastructure.  This is keeping many of the main contractors busy, such that any slow down in Government spending could cause a shock in the market.

With Hinkley Point finally getting the go ahead, this will create a general stress on UK construction, potentially pushing up pricing, particularly in the South West of England.

There are many reasons to remain optimistic, with those projects that are currently going ahead of a better quality and strong fundamental economics.  Major infrastructure projects are creating sustainable demand, which should finally see large construction companies invest in innovation and people.

About the Mid Group

Mid Contracting and Consulting is the UK trading business of the Mid Group, focused on the delivery of new projects using the best in off-site construction methods and modern technology.
The Mid Group is a dynamic construction, investment and development company, dedicated to providing enhanced value for clients and partners across the UK and Middle East through innovation and professionalism.

For more information visit the Mid Group site.