Home Building Figures in the UK – But Will They Be Enough?
The level of home building in the UK underpins nearly all housing market activity. Without a supply of affordable homes that keeps pace with demand, house prices remain prohibitive for many and greater pressure falls on the rental market.
In the UK it has long been the case that we’ve been playing catch up with the number of affordable homes available to meet demand, a failure of successive governments and planning authorities.
So when we look at the recent figures released by the Department for Communities and Local Government on home building, we must be assess them against the long-term failures of previous governments to meet demand. The recent statistics show that since 2009 the level of house building starts in the UK has doubled and now stands at its highest point since 2007.
The number of completions also stands at its highest level for six years, with both starts and completions having significantly increased in the 12 months to March 2015. In the year to March there was work started on 140,500 homes across the UK. That represents a 5 per cent increase on the previous 12 months.
During the first quarter of 2015 home building starts were up by 31 per cent on the previous quarter, and up 11 per cent on an annual basis compared to the figures from the same quarter in 2014. Completions in Q1 of 2015 were also up by 10 per cent on the previous quarter, and up 21 per cent on an annual basis.
It can’t be denied that this represents some kind of progress. And yet we have to temper this with the fact that the figure of 140,500 starts is still well short of the required number of starts needed to satisfy demand.
And if new builds continue to fail to meet demand there is expected to be a shortfall of 1 million homes by the year 2025. The Halifax reported the number of new properties becoming available was at its lowest level for years in May.
Market experts at Savills believe that the gap between units being built and those needed to house the population now stands at 136,000. The number of starts needed each year is over 200,000 – a long way from the 140,500 figure. Savills believes that only in 2020 will the number of starts hit the 200,000 mark, and then only if sufficient land is made available for building.
The experts also place the blame for 30 years of failure to meet housing demands at the door of planners. Applications to build have always been forthcoming, only the granting of consent has failed to keep pace, especially in East Anglia and the Home Counties.