The number of new homes being built fell to a three-year low during the second quarter of the year as housebuilding activity continued to slow.
According to Ministry of Housing Communities & Local Government only 37,220 new properties were started during the three months to the end of June, 2% less than during the first quarter and 8% down on a year earlier.
In the year to the end of June, construction was started on just 160,640 homes, nearly half the Government’s target for 300,000 new properties to be built per year.
Zoopla report that a number of factors have combined to hit housebuilding activity, Click Here to view their article.
- Brexit uncertainty has led to weaker demand as potential buyers adopt a ‘wait and see’ approach.
- The government plans to pare back the Help to Buy equity loan scheme by 2022.
- House building levels continue face challenges securing planning permission.
- Once on site there are also challenges managing labour and building material shortages.
Savills also reported falls in house prices across 2018 against 2017, a slowing of sales and an increase in construction costs. They suggest this is due to Brexit uncertainty too. This was seen in particular in the South East, whilst growth continued in other regions. The Sunday Times now suggests a reversal of this trend across 2019.
This is not good news, as:
- There needs to be a better match between supply and demand. We need to double the annual build rate.
- Planning needs to be more efficient and push important housing schemes through the process faster and with more certainty. For allocated sites the presumption should be in favour of development.
- The hesitation in the market can only be addressed by swiftly resolving Brexit, one way or the other, and removing uncertainty. If we exit the EU we are also likely to need the jobs created delivering the housing growth needed.
- Finally, all this is making conditions harder for first-time buyers and those who want to move up the property ladder. The very people who drive the market.
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