Housebuilding and infrastructure set to boost activity, RICS sentiment survey says

An increase in private and social housing delivery over the next year is likely, according to a new survey by the Royal Institution of Chartered Surveyors (RICS).

Private residential development has the strongest outlook since early 2022, with a net balance of +25, despite its current figure of -2.

While the score for social housing production dropped to -7 from -2 last quarter, growth is anticipated in line with the improvement of overall activity.

Infrastructure was revealed as the strongest sector and is predicted to drive development to a +34 net balance. Under infrastructure, the energy sub-category led the way, while rail fell behind.

Financial complications obstructed industry progress last quarter, negatively impacting +61 respondents, with pessimistic views on credit conditions persisting the survey added

However, +22% of respondents forecast some easing in lending rates given the likelihood of upcoming base rate cuts.

Planning and regulation issues adversely affected +58 of firms, while labour shortage remains a concern for +45 of participants. Almost half of respondents reported surveying as the most significant skills gap.

RICS chief economist, Simon Rubinsohn, said: “The overall tone of the feedback is still pretty flat, although the forward-looking indicators are a little brighter even in the area of residential development, possibly reflecting some of the ambitious talk from the new government about ‘getting Britain building’.

“However, there are some major challenges identified by respondents that need addressing to secure the more meaningful uplift in both housing and infrastructure that appears to now be the focus of policy. In particular, planning reform was very much front and centre in many of the remarks from a large number of contributors.”