The recovery in the wider housing market remains fragile, according to Glenigan. Any renewed weakening in the UK economy or potential rise in bank base rates from their current extremely low level would quickly erode market confidence.
Against this background, the outlook for the private housing sector will remain difficult and Glenigan anticipates only a modest improvement in sector starts over the next 12 months.
Planning approvals for private housing projects during 2009 were 38% down on the previous year. However, whilst both planning applications and approvals for new build private housing schemes remain extremely weak by historic standards, they have moved up from the low points reached at the start of last year.
Most of the major housebuilders have raised additional capital since last summer. Barratt has been among the latest to announce a rights issue in order to cut their borrowing and provide funds for discounted land purchases. However, whilst some housebuilders are now looking to add to their land banks, the latest data suggests that there will be no rush to bring forward acquired sites for development.