Brick production booming as Help to Buy heats up the market
The government’s Help to Buy scheme has spurred on the UK’s brick industry
The brick industry is ramping up production for the first time since the financial crash of 2008 after demand for the construction material surges.
Brick production in 2013 is expected to be around 1.73 billion bricks – enough to build 28 St Pancras train stations.
Eight out of ten bricks manufactured in the UK are used for housebuilding. At the end of July deliveries of bricks were had increased by 12 per cent on the previous year.
Housebuilders have put the increase in demand down to the government’s Help to Buy scheme which has seen housebuilding levels reach the highest level since the first quarter of 2008.
Registrations of new private homes during July, August and September were up by 20 per cent on the previous year, with 28,580 new homes registered.
The increase in demand caused by the Help to Buy scheme is leading housebuilders to ramp up production, building out existing sites which have been on hold, and looking to start on new sites sooner.
Brick manufacturer Ibstock has reopened a mothballed factory in Leicestershire as a result of the increased demand.
Housing minister Kris Hopkins said: ‘Help to Buy has not only helped thousands of hard working families get on the housing ladder, it’s also laid the foundations for a recovery in housebuilding, and confounded the critics who claimed it would have no impact on the supply of new homes.
‘Enough bricks will be made in 2013 to go 9 times round the earth or build 28 St Pancras stations, and I’m hoping next year we’ll make enough to reach the moon.’
Comment from the Brick Development Association
The Brick Development Association which represents the UK brick manufacturers is very supportive of the government initiatives to get Britain building. The Help to Buy scheme has provided a much needed boost to the housebuilding industry. There is a massive pent up demand for homes supported by potential purchasers who may well be paying more for rents than repaying a mortgage. We do however, have to realise house building is at a historic low. We can look back to the 1960’s when 450,000 homes were built in 1967. In 2008; 220,000 homes were started and we may start only 130,000 homes this year. We therefore should not get carried away. There is no unsustainable boom and house building is substantially below demand.
The low level of supply has contributed to house price inflation which is in no one’s interest. Some commentators have attributed elements of house price rises, to increase in house building, this is patently incorrect. We need a rise in house supply to supply demand. It is unfair that first time buyers have to wait until they are in their mid thirties before they can purchase their first home. House building is helping to promote; recovery from the recession providing growth and stability for our traditional industry and producing homes for which there is a very strong demand. Most of the money needed to produce homes is spent here in Britain, energising our economy and leading the country out of recession. Greater number of houses built will inevitably lead to house price stability.
The difficulty in providing finance is the reason for the low supply prior to this year and we are concerned about the withdrawal of Funding for Lending Support which we do not see as helpful in a fragile market. It may be that central government support is needed for a longer period of time in order to provide underlying support for the market. We also have to be aware that we are now in a dual speed economy. With London, a truly world city and hot spots such as Cambridge distorting the real market figures for the rest of the UK, we have to be careful that wealthy individuals from around the world choosing to live in the UK are not distorting figures for more normal and modest homes.
We are grateful for Help to Buy and other government initiatives and consider it vital that it continues to support and benefit the economy and the potential homeowners.