Higher number of new properties being built in UK masks underlying lack of homes, it is claimed

Good quality homes in the UK now becoming scarce

The UK is heading for a shortage of good quality homes despite new figures showing that the number of property starts are at their highest since the lows of March 2009.

There were 28,590 seasonally adjusted house building starts in England in the June quarter, up 13% from the first three months of the year and 84% above the trough in the March quarter 2009, the figures released by Communities and Local Government (CLG) show.

Though they are still 42% below their March quarter 2007 peak and experts are warning they are nowhere near what is needed.

Private enterprise housing starts were 10% higher than in the first quarter of 2010. By comparison, starts by registered social landlords were 17% higher over the same period the figures also show.

Property completions in England rose by 1% to an estimated 26,550 in the second quarter of the year, the first quarterly rise since the end of 2007, and follows a 5% fall between the December 2009 and March 2010 quarters.

Private enterprise housing completions were 1% higher in the second quarter of 2010 than the first quarter and completions by registered social landlords remained the same over the same period.

All regions experienced a rise in annual property starts between the 12 months ending June 2009 and the 12 months ending June 2010. Overall they rose 44%, totalling 98,500.  Annual housing completions in England totalled 110,210, down by 13% compared with the 12 months to June 2009.

The Royal Institution of Chartered Surveyors believes though these figures mask a more worrying trend. ‘Both the private and public sectors contributed to the better numbers, which in aggregate were 13% higher than in the first three months of the year. While on the face of it this appears encouraging, there are good reasons for questioning whether this more positive trend will be sustained for the rest of this year and into 2011,’ said Simon Rubinsohn, RICS chief economist.

‘The recently published RICS Construction Market Survey shows new enquiries to begin housing projects actually turned negative in the second quarter of this year. Meanwhile, the Home Builders Federation has highlighted a drop in site visits and an increased use of incentives in its latest report. With HCA funding being scaled back, a drop in house building from the social sector is inevitable,’ he explained.

‘Meanwhile, with the private sector now in the process of replenishing its inventory, the likelihood is that its output will soon begin to stabilise. Critically, we suspect that housing starts this year will amount to around 110,000 and the number for next year will be little higher. With demographics arguing for more than double this total on the most recent analysis, the prospect of a medium term shortfall of good quality homes is a very real concern,’ he added.

One Response to “Higher number of new properties being built in UK masks underlying lack of homes, it is claimed”

  1. What is a "good quality home"? The term is redundant because all new-build properties are good quality nowadays, miles better than most second-hand homes. This is because of the stringency of building regulations and the very high levels of insulation and airtightness now required, which gives very low fuel bills to buyers of new houses.

    I question the perception that there is a lack of houses being built. Demographics and rates of household formation are not a fact of nature. In hard economic times, people will adjust by living in their current conditions and even increase the density of occupation, not reduce it. They will simply not be able to afford the high price of living in ever-reducing family sizes. The cuts in housing benefits will see more young people under 35 in houseshares, rather than expecting to live in a flat of their own. The simple fact that housing enquiries are falling shows that demand is adjustable if supply is too low and too expensive.


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