This increase in construction starts occurred in the private residential sector and, combined with the prospect of lower mortgage rates, this has created optimism of greater residential transaction activity before the end of 2024.

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“It’s heartening to see project starts rising during the index period,” said Drilon Baca, economist at Glenigan. “As market inflation and persistently high interest rates start to ease, we’re noticing an increasing confidence among developers which is starting to buoy the residential construction market.”

Glenigan has attributed a “more positive background” to mortgage approval rates hitting a two year high of 62,000 in July while house prices also rose. In August, house prices rose at their fastest rate in two years by 4.3%, according to Halifax. 

Positive sentiment from several major housebuilders was also flagged.

In particular, August saw Persimmon report a private forward order book of £1.12bn that was 28% higher from 2023.

Bellway’s order book also increased and by the end of July was 5,144 homes, up from 4,411 at the same point in 2023.