■ Moving into 2018, a slowing of demand is forecast, as uncertainty stalls new orders and is predicted to remain flat in 2019, according to data from G&T.

■ Our overall S.P.E.C.S score for the third quarter is 20, demonstrating that in most sectors costs are generally stabilising or showing a slower rate of increase. For the first time this year timescales also increased for the industry meaning projects are taking longer to deliver, with lead times on some materials such as steel going out.

■ However, the differing drivers associated with the commercial and residential sectors have become increasingly apparent with planning delays hampering delivery of larger unit schemes.

^{*Timescales definition: The time taken from project sign off to project commencement including the procurement and delivery of building components}

^{Source: Savills Building and Project Consultancy}

^{Source: Savills Research}

Residential project costs stabilise

■ Rather than the modest above inflation increases in prices that have been experienced over the last two quarters, evidence now indicates a general softening of construction costs due to steadying in the devaluation of sterling and contractors reacting to a reduction in volume of new orders.

■ Tender costs for refurbishment and development works are predicted to be generally in line with inflation going into the second half of 2017, with below inflation increases in the medium term. This comes as new order levels start to reduce due to the continuing uncertainty caused by Brexit; and contractors reacting with a reduction in tender prices, bringing a squeeze on margins.

^{Source: HBF}

■ In the prime refurbishment market, although there is still a large amount of current activity, Savills are seeing more enquiries from architects, consultants and contractors keen to fill their order books into next year and beyond.

■ This predicted softening of activity will be in contrast to the new-build housing market where government incentives for first time buyers continue to provide market opportunities for house builders in the medium term, even as the higher end of the new-build market slows.

■ Help to Buy has been significant in supporting the increase in supply of new homes, supporting 35% of all new build sales in England since it was introduced in April 2013 and has been predominantly used by first time buyers (81% of sales using the scheme). 210,000 new homes were built in England in 2016 up from 130,000 in 2013 but still below the 225,000 to 275,000 homes needed per year as stated in the Housing White Paper.

■ In general, materials costs are also becoming more of a major constraint for housebuilders. In the HBF survey, materials costs are now the second largest constraint with 33% considering it a major constraint. Labour availability also remains a limitation, with 43% considering it a major constraint. However, the largest house builders have more control over their costs as they are able to secure their supply chain in advance. Nationally, the major housebuilders (those delivering over 2,000 homes per year) have led the increase in delivery of new homes, now accounting for 77% of the market according to NHBC.