Figures out this week showed that in the second quarter of this year, the number of new homes built in England rose for the first time since 2007. The Communities and Local Government website stated that the number of new housing developments begun during the period April to June 2010 was 84% higher than when the market hit its low point during the first quarter of 2009.
At this time house building rates were at their lowest since WW2. But CLG added that despite the improvement, new build levels were still 42% below their peak in the first three months of 2007. Developers were hit hard by the global credit crunch, which led to halting or slowing of construction on many sites, but the sector has been showing signs of recovering as the housing market has improved. Housing completions edged ahead by 1% to 26,550 during the three months to the end of June, the first quarterly increase since the end of 2007, according to Communities and Local Government.
There was also a 13% jump in the number of new homes that were started during the same period, reaching a two-year high of 28,590. Within this total, there was a 10% increase in the number of properties being built by private developers and a 17% rise in ones started by registered social landlords. However, the number of new homes for sale is at a record low. Steve Lees, marketing director of SmartNewHomes.com, looked to the coalition to provide a framework for developers within their housing policy.
Mr Lees said; ““On assuming office, CLG Secretary Eric Pickles was quick to sweep away the Regional Spatial Strategies (RSSs) that formed the basis of the previous administration’s housing policy. In its place, however, is a policy vacuum — a nightmare scenario for the industry. The result has been a dramatic decrease in the number of new homes coming on to the market: The figures for July show a new record low in the number of new homes for sale for the second consecutive month.” Mr Lees was not encouraged by the government’s “New Homes Bonus”, outlined by Housing Minister Grant Shapps. This scheme aims to match council tax over six years – a total of approximately £8,500 per new home — to encourage councils to agree to new developments. However, this is widely seen as not enough to counter a rising level of nimbyism from local communities.
Kay Boycott, director of policy and campaigns at Shelter, said: "Today’s figures show housing completions are up this quarter, but are still only half of what’s needed to meet demand. With the economic recovery still shaky and millions struggling to access an affordable home, we need to see bold and immediate action to stop us falling further and further behind."
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said that while today’s figures looked encouraging, there was good reason to question whether the trend could be sustained for the rest of the year and into 2011. He said: "The recently-published RICS Construction Market Survey shows new inquiries 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. Critically, we suspect that housing starts this year will amount to around 110,000 and the number for next year will be little higher”. He added that with demographics suggesting more than double this number of new homes was needed, the prospect of a medium-term shortfall of good quality homes was a "very real concern".