Number of new-build houses falls short despite small increase

http://www.theguardian.com/money/2015/feb/19/new-build-houses-falls-short-despite-small-increase

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Despite a rise in housebuilding last year, the number of new homes built was less than half the figure needed to keep pace with demand and arrest the growing shortage.

Official figures from the Department for Communities and Local Government showed that 118,760 homes were completed during the year, an increase of 8% on the previous year but far below the 250,000 most experts say are needed to begin to tackle the country’s housing crisis.

Quarterly figures showed the number of new houses started was down by 39% on the peak hit in March 2007, while completions were down by 26% on the same period.

Experts warned that the failure to build more homes would be “felt for generations to come” and push house prices further out of reach of aspiring homeowners.

Even before the credit crunch building was failing to keep up with growing demand, but since then the gap has become bigger.

“We need a huge increase in momentum if we are to have any hope of tackling our national housing crisis,” said Gavin Smart, interim chief executive at the Chartered Institute of Housing. “In 2014, we built less than half the number of new homes we need to keep up with our growing population and help the millions of people who are being priced out of a decent home.”

Henry Gregg of the National Housing Federation, which represents housing associations, described the figures as “a damning indictment of our failure to tackle the housing crisis”.

He said: “With building numbers below half what is needed, we’re creating a housing shortage that will be felt for generations to come. Every year the country fails to build enough homes is another year that aspiring homeowners are priced out, young people are trapped in childhood bedrooms and families struggle with high rents.”

The government figures for 2014 showed that the number of new starts on building sites around the country was up on the previous year, rising 10% to 137,010.

The number of new starts fell by 9% in the last three months of the year compared with the same period in 2013, with 29,800 homes getting underway.

Campbell Robb, chief executive of the housing charity Shelter, said it was shocking how few homes were being built. “What’s even more worrying is that the number of new affordable homes started has fallen dramatically in the last three months,” he said.

“Piecemeal schemes like Help-to-buy are only papering over the cracks. With the general election around the corner and housing one of voters’ top concerns, it’s time for politicians to stop just talking about the issue and finally commit to building the affordable homes we so desperately need.”

Smart also said politicians needed to act to solve the housing crisis. “We want all political parties to commit to ending the housing crisis within a generation, and we think the government should take a more active role in boosting housing supply,” he said.

Meanwhile, figures from the Council of Mortgage Lenders showed a fall in demand for mortgages at the start of the year, with gross mortgage lending down 14% in January at £14.3bn.

The figure was down by 11% on January 2013, but the group said lending was on track to hit £222bn this year.

The CML’s chief economist, Bob Pannell, said: “The softer pace of approvals through the second half of last year contributed to the relatively weak pace of mortgage lending in January.

“Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent stamp duty changes.”