London’s construction market is set to outpace the rest of the country going into 2011, according to the latest quarterly Market View from EC Harris, the Built Asset Consultancy.

The EC Harris report predicts that London tender prices are set to move out of the red in the second quarter of 2011 and to grow by 2.5% across the following 12 months. This will be followed by a stronger increase of 3.5% going into 2012-2013. The situation in London is in stark contrast to the rest of the country where the recovery is expected to be much slower. National tender prices are forecast to decrease by 3.3% to the second quarter of 2011, and then increase by just 1.2% in the year to the second quarter 2012. Beyond this national tender prices are then anticipated to grow by 2.6-2.8% in 2013-14.

With public sector spending being severely cut, the London upturn will be led by the private sector. According to EC Harris, developers are already looking to take advantage of a lack of Grade A offices and an anticipated uplift in residential values which will drive the commercial office and private residential sectors.

Paul Moore, head of cost research at EC Harris, said: “Despite the expected huge drop in public sector activity, we believe that the prospects for the private sector remain optimistic. There is a significant amount of pre-planning activity taking place in London, and it only needs a few of these major schemes to go ahead for us to see a significant increase in schemes being built from 2011.”