Social landlords hit as housing starts plummet
House building starts in England have dropped with social housing taking the biggest hit as housing association figures plummeted by 21 per cent.
Communities and Local Government department figures published today show housing starts in England fell by 11 per cent from 27,240 homes in the last quarter of 2011 to 24,140 in the first quarter of 2012. Housing association starts went down from 5,010 to 3,950.
Completions went up by 6 per cent from 29,360 in the last quarter of 2011 to 31,010 in the first quarter of 2012. Housing association completions increased by 8 per cent from 6,910 to 7,430.
Local authority completions fell from 680 to 110, with local authority starts also falling from 380 to 100.
Campbell Robb, chief executive of housing charity Shelter, said: ‘The fall in construction is one of the key reasons we are still in a recession. So to see house building starts down 11 per cent on levels that already don’t even scratch the surface of what’s needed is extremely concerning.’
He said more construction investment is needed to create jobs and economic growth.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: ‘There are good reasons for expecting government policy to gradually have an impact on the level of starts.
‘The Newbuy mortgage indemnity scheme only started a couple of months back and is taking a while to gain traction. More important for the medium term could, however, prove to be the planning changes that has been pushed through by the government. But even if the measures do begin to pay dividends, it is hard to see to the increase coming anywhere near the level of new housing required.’
National Housing Federation chief executive David Orr said: ‘Bold and decisive action is needed to fix our broken housing market and help the 4.5 million people stuck on waiting lists. We are pleased that the prime minister has now asked the Treasury to examine what more can be done to boost credit for business, housing and infrastructure. During these difficult economic times, housing associations are pulling out all the stops to maintain the supply of new homes.’
Housing minister Grant Shapps was positive about the stats, tweeting: ‘New house building figures show housing starts in 2011 were up 29 per cent on 2009.’
The figures in context
Starts experienced a period of sustained growth from 2001 until 2005, averaging around 44,000 units each quarter until late 2007, but went into rapid decline in the economic downturn of 2008.
Completions were affected by the downturn but more gradually and have been stable since 2010 – along with starts. There has been an average of 28,000 completions over the past nine quarters.
Starts are currently 42 per cent above the trough in the March quarter 2009 but 50 per cent below the December quarter 2005 peak. Completions are 36 per cent below their March quarter 2007 peak.
The CLG figures also show annual housing starts totalled 104,970 in the 12 months to March 2012, down by 6 per cent compared with the 12 months to March 2011.
Annual housing completions in England reached 117,870 in the 12 months to March 2012, an increase of 6 per cent compared with the 12 months to March 2011.