NEW BUILD SHORTAGE STRENGTHENS PROPERTY PRICES

National Home-building figures seem to be in danger of missing this year’s new build target

Government House new build report

While the building industry is thriving in the south – all the way from London to Devon, and up towards Worcestershire, the building industry is keeping up with demand for new build properties, however in the North of England, Wales, and Scotland, the picture is less busy.

The official figures on new builds were released by the Government last week, and they show a decline of some 11% in ‘annual starts’ – the point at which a developer begins working on a building plot. See the full report here.

This is embarrassing for the Government, after they promised to ‘get Britain building’, to ensure adequate housing, and to boost the economy by building our way out of recession.

Shelter’s chief executive Campbell Robb commented:
“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.”

These new starts figures show annual starts at a little over 98,000 for the year, which is the worst figure since 2009. This was the very worst year of the current recession, and was the only other time that the annual starts figure dropped below 100,000 since records began, 30 years ago.

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.

This shortfall in new build property will make it very difficult for first-time buyers to get on the property ladder. However this imbalance between supply and demand in the housing market will continue to support house prices, and rental values, so it is not necessarily bad news if you are already on the property ladder, or if you are an investor landlord.

Go to Riley Marshall property search  If you are looking for new build property in South East London Riley Marshall has links with local developers and we are always updating our property portfolio, click to go through to our property search.

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