Booming housebuilders pushed output across the construction sector up 2% in December last year, according to revised official figures, as rising house prices and cheap loans rates encouraged builders to expand the number of house starts.
"Despite a slow beginning to the year where construction output fell 1.0% in the first quarter, output grew steadily throughout the year and has produced three consecutive quarters of growth for the first time since the third quarter of 2010," the ONS said.
The country's construction sector – which accounts for 6.3% of gross domestic product – has benefited from a sharp pickup in the housing market, supported by government schemes such as Help to Buy and record low interest rates.
New housebuilding was up 4.9% in December, ahead of all other areas of construction. The ONS said total housing construction in the fourth quarter was 19.8% higher than a year earlier – the strongest increase since the fourth quarter of 2010.
But the pace at which new homes are coming on to the market has still lagged demand, pushing up house prices. Would-be buyers are being priced out of the property market despite government efforts to help them onto the housing ladder.
"Good news for the economy on the construction front with a … rebound in output in December providing reassurance that the sector's recovery remains firmly on track," said
Construction output rose by 0.2% in the last three months of 2013, a slowdown from 2.6% in the third quarter but stronger than the slight fall of 0.3% that had been pencilled in when preliminary GDP data was released for the fourth quarter.
On the year, output is up 6.3%.
The upward revision to the fourth-quarter construction figures was helped by a 2.0% rise in production in December after a 4.0% fall in November.
A survey of purchasing managers this month suggested the construction industry has since picked up pace and saw its sharpest expansion in January since
After the financial crisis British construction output slumped heavily and is still 12.2% below its pre-crisis peak – a weaker state than manufacturing or the services sector.
But in the past year house prices have risen nearly 9%, according to mortgage lender Nationwide. This is the biggest rise since 2010, and fears of a possible bubble prompted the Bank of
"With confidence in the economic recovery building, interest rates still low and house prices booming, 2014 should be another strong year for builders. Though the first quarter may well see sizeable disruption from the weather, output will bounce back when the weather improves as builders make up for lost time."
The Treasury said the figures provided further evidence that the government's long-term economic plan is working.
"It is particularly encouraging to see that construction of new housing last year was higher than in any of the past six years. But the job is not done, so the government will continue to work through the plan to deliver economic security for hardworking people," a spokesman said.
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