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Buy to let looks to continue to prosper as surveyors presented a drab picture of the construction industry.
The government has admitted the country needs an influx of infrastructure and housing projects to boost the economy and provide much needed homes over the few years.
Although difficulties in sourcing mortgages are holding back home buyers, in the long term more homes need building to meet demand.
The UK needs 220,000 new homes every year – and less than half that number were built last year, according to the Communities and Local Government Department.
However, only 14% of surveyors reckon the government will raise the cash wanted from pension funds and other institutional investors to meet ambitious construction targets set by Chancellor George Osborne in his autumn budget statement.
According to the latest UK construction industry review from the Royal Institution of Chartered Surveyors (RICS), covering the last three months of 2011, the number of new projects is falling.
RICS reports private sector projects are ‘flat’ while 17% of surveyors saw a decrease in the number of public sector projects.
Across the UK, a widening gulf is appearing between spending in London and the South East rising and that for the rest of the country faltering.
Surveyors expect no improvement for the rest of this year. Four in 10 surveyors predict falling profits for their businesses – the 16th quarter in a row they have put forward a pessimistic view.
Simon Rubinsohn of RICS said: “With workloads continuing to fall and costs slowly increasing towards the end of the year, the outlook for the construction industry remains rather downbeat with no prospect of improvement in sight.
“Particularly worrying are the questions being raised over the government’s plan to secure institutional funding for infrastructure projects. We would hope that this scepticism proves to be overly pessimistic, but the responses highlight the sizable job the government still has to do in convincing industry professionals that this approach is going to deliver.”
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