UK housebuilding activity fell at the sharpest rate for three years last month, despite growth improving across the wider construction industry.

According to the latest PMI data by S&P and CIPS, the headline construction PMI rose slightly to 51.6, up from 51.1 in April. The increase comes despite housing activity falling for the third consecutive month to 42.7, reflecting the weakening demand in the housing market. Any score below 50 is considered a decline, whereas anything above is seen as growth.

Kelly Boorman, partner and national head of construction at RSM UK, said: ‘The continued fall in housebuilding for May does not come as a surprise, and although only slight, highlights the weakening demand for housing as people are still cautious given interest rates and the cost-of-living crisis.

“The UK’s housing market is showing signs of distress as net mortgage lending contracted by £1.4bn in April, the lowest level on record excluding the pandemic. But, with mortgage rates set to jump even higher, coupled with house prices falling at the fastest rate since July 2009, there are further headwinds for the housing market, with housebuilders pulling back on projects to protect their margins.”