Housing starts plummet
New government figures show that the number of year-on-year housing starts plummeted in 2012
According to official data, just 98,280 new homes began on site in 2012 - a drop of 11 per cent on the total in 2011. The worrying statistics mean the UK is only building half the homes required to meet current demand and suggests the raft of government incentives aimed at kickstarting the housing industry are failing.
However figures released for the final quarter of 2012 [Q4] show the number of private housing starts was one per cent higher than those for the previous three months - though starts by housing associations were 10 per cent lower than in Q3.
In response to the figures, the British Property Federation (BPF) has called for the expansion of an institutionally funded private rented sector releasing funding for longer-term rented homes.
Ian Fletcher, director of policy at the British Property Federation, said: ‘Against the backdrop of these figures we need to seriously think about how we’re going to build the homes this country needs to meet growing demand.
‘As things stand the owner occupied model just isn’t delivering the required numbers, and we need to focus on a range of options.
‘To improve overall housing supply it needs to be affordable, does not require access to mortgage finance and not put undue strain on tight public finances. An institutional-funded professional rented sector, building to let, ticks all these boxes.’
These figures demonstrate the scale of the problem facing the country
Simon Rubinsohn, a chief economitst at RICS, said: ‘These figures demonstrate the scale of the problem facing the country in delivering sufficient homes to accommodate a rising population. In the final three months of last year, less than 27,000 new houses were started in England alone, leaving the final figure for the whole of 2012 below 100,000. Weakness was visible in all sectors although the biggest decline was from housing associations which saw a drop in starts of more than 20 per cent.
‘Notwithstanding this, RICS expect the volume of activity to increase over the coming quarters helped by some of the measures introduced by government. However, even allowing for this, starts are only likely to reach 115,000 this year which is way short of need. This imbalance between demand and supply is likely to continue to underpin the relative resilience of both house prices and rents.’