30 year low in new home building figures

Efforts by the government to stimulate house building in England seem to be running into problems – their latest official figures show annual starts fell 11% to 98,280, significantly below the numbers needed to keep up with demand.

The best areas for new build starts according to the report are along the M5 corridor from Devon up to Worcestershire and in areas north of the London green belt in Buckinghamshire, Bedfordshire and Cambridgeshire. There are also high levels of house building starts along the A303 route from the edge of London through Hampshire into Wiltshire. Areas with much lower levels include a band running from Birmingham up to Manchester and spreading across into the south of Cumbria and North Yorkshire. There are also low levels in eastern parts of Kent.

“This government promised to get Britain building,” said Shelter’s chief executive Campbell Robb, “yet these figures show house building has hit record lows. Apart from the height of the recession in 2009, this is the only time starts have dropped below 100,000 since records began over 30 years ago. Ultimately, it’s ordinary people who pay the price, with families struggling to meet ever-rising rents and young couples unable to get on the housing ladder no matter what they do.

“The slump in our construction industry is one of the main reasons we’re facing the threat of a triple dip recession. We can build our way of out of this, but the government has to use next month’s budget to unlock the finance to deliver more genuinely affordable family homes. Unless action is taken now, it’s hard to see our housing crisis improving any time soon.”

Simon Rubinsohn, RICS Chief Economist, said: “These figures demonstrate the scale of the problem facing the country in delivering sufficient homes to accommodate a rising population. In the final three months of last year, less than 27,000 new houses were started in England alone. Weakness was visible in all sectors although the biggest decline was from housing associations which saw a drop in starts of more than 20 per cent.

“Notwithstanding this, RICS expect the volume of activity to increase over the coming quarters helped by some of the measures introduced by government. A slightly more positive tone is also visible in the results of the latest RICS Construction Survey. However, even allowing for this, starts are only likely to reach 115,000 this year which is way short of need. This imbalance between demand and supply is likely to continue to underpin the relative resilience of both house prices and rents.”

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• kazibeth

  This government is determined to do everything it can to keep house prices and rents rising.

  If they really cared about providing homes for people in the UK, they would cut overseas aid, and give the money to housing associations to build more affordable homes. In addition, if they hadn’t wasted 75m on the ridiculous elections for the Police Commissioners, that could have gone into the pot too.

  The greatest benefit, however, would be to bring back the Fair Rent Act, and stop private landlords from cashing in on the housing shortage.

  But they won’t do any of those things, because that would upset their main donors – those people who are getting very rich from the current housing shortage!

  So of course the “imbalance between supply and demand is likely to continue” – as part of the plan.