Construction industry analyst Glenigan has revealed significant growth in the value of private housing project starts in the first half of 2012.
The new research revealed a 40% rise in the underlying value of private housing project starts in Q2, compared to the same quarter last year, and follows a 30% year-on-year rise in Q1 2012.
The data also found planning approvals for private housing developments rose by 57% in the three months to May, compared to the same period in 2011.
London and the South East remain the dominant regions in the UK, accounting for almost a third of the value of all new private housing schemes starting on site.
The rise in activity is being partly credited to the success of the government’s mortgage indemnity scheme, NewBuy, where the government will guarantee mortgages with just a 5% deposit for newly built properties.
Allan Wilén, economics director at Glenigan, said: "The weak economy and a banking sector that is seemingly loath to lend have constrained the private housing market over the last two years. Capital is still at a premium and banks are charging relatively high prices for access.
"However, developers have cited increased demand from first-time buyers, spurred on by government incentive schemes, as one of the main reasons behind an increase in building.
"Such measures, combined with historically low interest rates and further liquidity being pumped into the UK economy, have created favourable conditions for first-time buyers, who have historically been the main drivers of the housebuilding sector.
"While the threat of an increase in interest rates and the end of the stamp duty holiday have stymied the market to a certain extent, we expect the sector to continue to grow through 2012 and 2013 as the wider economy begins to recover once more."