Number of new homes completed in England falls to lowest level since 2016
In a blow to new housing targets, the latest official figures show that the number of new homes started in England in the first quarter of 2018 were down by 5% compared to the final quarter of last year.
The figures from the Ministry of Housing, Communities and Local Government (MHCLG) show that starts also fell year on year, reaching 39,350 in the first quarter of 2018, a fall of 8% compared with a year earlier.
Completed homes also fell, down 9% on a quarterly basis and down 4% compared to a year ago. It means that completions are at their lowest since the first quarter of 2016.
Annual new build dwelling starts totalled 157,480 in the 12 months to March 2018, down by 3% compared with the year to March 2017. During the same period, completions totalled 160,470, an increase of 8%.
The figures also show that while all starts are now 109% above the trough in the first quarter of 2009, they are still 14% below their peak in the first quarter of 2007. Completions are 50% above the trough in the first quarter of 2013 and 9% below their peak in the first quarter of 2007.
The industry is warning that the number of new homes built is falling short of what is needed to meet the Government target of 300,000 a year by the mid 2020s. Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), pointed out that when looking at the data over an extended period of time it is clear that quarterly housing starts remain well below pre-financial crash years.
Kate Davies said:
‘The number of housing completions is at its lowest since the first quarter of 2016, despite ongoing policy pledges to mend what the Government has itself described as the broken housing market. To have any hope of rebalancing the relationship between housing supply and demand, the Government must do more to instil confidence in the new build sector.’
She also pointed out that there has been a commitment to improve access to mortgage finance, and IMLA’s data suggests that first time buyers are faring better than any other customer group in the market. It found that 90% of applicants via intermediaries secured a mortgage offer in the first quarter of 2018, suggesting that a shortage of products is not the issue.
‘However, what is needed are measures to support the full housing spectrum, not just first time buyers. We’re faced with an increasingly illiquid market, with home owners now only moving once every 19.2 years, compared with every 7.4 years in 1988, as price inflation and a lack of suitable options mean many steppers struggle to find homes to meet their changing needs, such as a growing family or getting older.
‘This lack of new homes coming onto the market organically means the new build sector must continue to be supported. As a starting point, we need clarity over the next phase of policies once the current Help to Buy scheme comes to an end in 2021.’
Kindly shared by Property Wire