New home builds in drastic shortfall
Monday 9th July 2012
The number of new homes being built each year in England will fall below 100,000 if current trends continue. The Government’s target is 185,000 new homes this year.
But according to a new report by BNP Paribas, ‘Housing the Nation’, the UK’s well-documented housing shortage has been compounded by a steady reduction in house building since the start of the economic downturn – with the situation worsening in the last 12 months.
The report says that before 2008, the average number of quarterly starts on new homes was over 42,000. It has since dropped by nearly 40% to fewer than 26,000.
Starts in the last two quarters have fallen back further to levels last seen in 2009, the lowest point in recent times for house building.
But house building this year could fall below 2009 levels, says the report. It says that starts were 18% down in the first three months of 2012, compared with the same quarter last year.
In some regions such as the North-East and North-West, house-building levels have more than halved since 2007.
The report blames a combination of economic uncertainty, lack of consumer confidence, local authorities’ ‘not in my backyard’ attitudes and the dearth of mortgage finance. It also criticises the Government’s planning reforms, the National Planning Policy Framework, for being ambiguous and creating confusion.
Tim Cann, head of development and residential consulting at Paribas, said: “With more than 1.8m households on council waiting lists, the report reveals that the Government is on track to miss its targets by a worryingly large number.”
Last year, the Government’s target was 185,000 new homes in England, but just 110,000 were built.
The report says that under new localism powers, local authorities in England have cut this year’s 185,000 target to 160,000. Only half of local authorities have stuck with their old house-building targets, while 24% have reduced them and only 8% raised them. A further 18% of councils have not yet decided.
The report’s authors say their expectation is that new home completions this year will fall below 100,000.
The report says that the provision of affordable mortgages is essential for the sector to recover.
More controversially, it calls for Green Belt land in the South to be released for new homes, and says that local authorities which reduce housing targets should be made to repay the New Homes Bonus.
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