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Increase in new homes - but numbers still short of national demand

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The number of new houses started in England last year increased significantly, official figures show

Data released from the Department of Communities and Local Government (DCLG) showed a total of 137,000 new homes were started in 2014 - a 10 per cent increase on figures from the previous year, and a huge 36 per cent on 2012.

The number of new homes started has gradually increased since a low point in 2009. However the Home Builders Federation (HBF) said this was still ‘way short’ of the 230,000 homes needed per year.

The HBF attribute this accelerated growth to the launch of the Help to Buy scheme in April 2013 which led to an extra 40,000 homes being built compared to the year before the introduction of the scheme (2012).

According to the HBF, despite Help to Buy driving demand for new homes in the country, constraints still remain, predominantly with the planning process.

Stewart Baseley, executive chairman of HBF, would like to see further incentives to encourage house building in England.

He said: ‘Improving consumer confidence and the Help to Buy scheme have increased demand for new homes and the industry has responded.

‘However, we are still way short of building the number of new homes the country needs. As we approach an election, all parties need to focus on how we can increase housing supply still further’.

The DCLG report shows that the main areas with strong house building figures were those in the south of the country, with areas from the M1 corridor and west towards South Gloucestershire as well as areas north of the London green belt, experiencing significant growth.

The greatest increases in starts levels were in districts in the East Midlands, Lancashire and parts of Essex, with the largest falls in building starts in areas including Hampshire and Surrey.

But while housing starts figures are at a high, completion figures lag behind at only 118,700 - below government objectives and 25 per cent below the 2007 peak.

These figures are of particular concern for housing charity, Shelter, which remains worried about the number of affordable homes being completed.

Since 1979 there has been a 30 per cent decline in social housing.

Campbell Robb, chief executive of Shelter, said: ‘While a small increase in the number of homes built might be heralded as a success, the real story here is the shocking fact that we’re building just half the homes we need in England’.

Comment:

Tom Crane, economist at Glenigan:
‘These figures fit with what we’ve been seeing. In terms of underlying value we recorded a 14 per cent rise in private housing starts last year. However we saw a slowing in the rate of growth during the second half of last year - and there was an overall drop in social housing.

‘In terms of forecasts, we predict a 12 per cent rise in the underlying value of private housing starts in 2015, but a 12 per cent drop in the social housing sector.’

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