Government house building figures released

Thursday, 19 February 2009 4:14 PM

The government has today released housing statistics for the final quarter of 2008, which show housing starts down 58 per cent from Q4 of 2007.

The figures showed a record low for the number of new homes being built.

Housing starts, which are the number of private new homes under construction, stood at just 16,300 in England alone in the December quarter.

Private enterprise housing starts were 64 per cent lower than the December quarter of 2007, with annual housing starts figures for England continuing to decline, totaling 105,000 in 2008, down some 37 per cent compared with 2007 and 43 per cent below their 2005-06 peak.

Gillian Charlesworth, spokesperson for the Royal Institution of Charter Surveyors (Rics), said: "The current financial crisis is making it almost impossible for developers to get the loan finance needed to deliver the UK's housing needs for the future.

"If the current downward trend continues the government will be on target to build less than one third of the two million new homes needed by 2016.

"Compounding this is the current lack of mortgage finance for buyers, meaning developers are reluctant to commit to projects which may end up attracting nothing but a for sale sign.

"The government must take immediate action to ease restrictions on lending and work with the Homes and Communities Agency to increase development through housing associations. Failure to do this will result in serious undersupply problems both now and in the future."

The figures also showed how housing completions in England fell by three per cent to an estimated 32,300 in the December quarter, compared to the previous quarter, and 25 per cent compared with the same quarter in 2007.

Annual housing completions in England totalled 141,900 in 2008, down by 19 per cent compared with 2007 and housing starts by Registered Social Landlords fell by five per cent.

Chairman of the Local Government Association Housing Board, Cllr Paul Bettison, said: "The slowdown in private sector house building will eventually affect the amount of affordable housing that is being built. This will mean fewer new social homes at a time when there will be more demand for them.

"Even when the economic good times were rolling, councils saw ever increased pressure on their social housing stock. Now that the recession has hit, many thousands more people will be looking to councils to provide them with a permanent home as they find it impossible to get on the housing ladder or see their home repossessed.

"With on average every year 90,000 more households joining the ever increasing social housing waiting list over the seven years, experience has taught us that demand will grow even faster.

"Councils want to provide decent homes quickly for those who cannot afford to rent in the private sector or buy their first home but have been hamstrung by the lack of freedom to borrow off council assets in order to invest in building or buying new homes for those who need them most.

"Social housing has to be a top priority because the harsh reality is that fewer people are getting on to the housing ladder."

Federation of Master Builders director of external affairs, Brian Berry added: "These figures are more proof, if more proof were needed, of the depth of crisis we are now in.

"With new household creation creating demand for 223,000 new homes per year the country cannot afford to allow the continued disintegration of UK house building capacity.

"The government needs to stop dreaming up new taxes like the ill conceived Community Infrastructure Levy, and instead devote its energies to accelerating planning reform, and the institution of a mass public house building programme.

"If it shirks this responsibility, its legacy will be a generation for whom the home ownership that many consider a basic right, becomes little more that a pipe dream."

A spokesperson for the Department for Communities and Local Government stated the house building targets still stand - despite the government being less vocal about them than they were before the economic crisis: "We are not obsessed by targets on a day-to-day basis, we are planning for the long term needs.

"At the moment the short-term priority is the economic situation and we are still planning for long term needs."

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