Supply of new homes in UK falling well below demand despite rising development

Taylor Scott International News

Activity in the UK house building sector has continued to pick up over the last year, but the supply of new homes is still falling well short of demand, a new analysis report shows. Boosting supply where new housing is most keenly needed, is a key priority if the UK housing market is to avoid long term distortion, according to the latest annual house builder survey from real estate firm Knight Frank. House builders say policymakers shout boost resources for local authority planning departments, increase skills and training for the construction sector and step up the delivery of public sector land to help increase the supply of new homes, the report explains. The survey, which shows the views of more than 160 respondents from house builders and developers across the country, also shows that two thirds of those in the industry believe that the maximum number of new homes which can be sustainably delivered across the country every year is 180,000 or less. Only 9% said that an annual supply of more than 200,000 homes was possible. Nearly 60% of respondents expect housing completions to rise over the next year, with 18% saying the rise could be between 10% and 25%. However around half of respondents expect no change in the delivery of affordable homes over the next 12 months. More than 90% of respondents are expecting construction costs to rise again over the next 12 months and two thirds expect that development land prices will rise again this year. Indeed, rising labour and build costs are expected to pose the greatest risk to the sector in the coming year. The biggest policy change that would help boost development volumes would be recruiting more people to local authority planning departments, according to respondents. The imbalance between the demand for new homes and the number of units being built is well-recognised, by the industry and political parties alike, the report points out. In the 12 months to April 2014, some 141,000 homes were built in the UK, up by 4% on the previous year. However, official household growth projections suggest an additional 230,000 potential households a year in the UK. ‘Below these headline figures, there is a recognition that the right type of homes must be built in areas where there is the most housing need, typically adjacent to existing urban areas. This has led to tensions about the greenbelt, with a lack of consensus on how to expand accommodation in some of the UK’s most thriving towns and cities,’ said Grainne Gilmore, head of residential research at Knight Frank. ‘Nearly one half of the respondents to the house builder survey said that rules around developing on greenbelt land should be loosened,’ she added. The report explains that policymakers from all parties are keen to encourage development on brownfield land and the Royal Institution of Chartered Surveyors has recently published research suggesting there is enough brownfield land available in England to build 226,000 homes… Continue reading →

The post Supply of new homes in UK falling well below demand despite rising development appeared first on Taylor Scott International.

Taylor Scott International

Taylor Scott International, Taylor Scott

Comments are closed.