Concern grows as housing registrations drop by 20%
Builders and social landlords have expressed grave concerns over England’s growing housing shortfall after new figures revealed a continuing fall in house building numbers.
Statistics from the National House Building Council today reveal that 20 per cent fewer homes were registered in England in the three months to the end of April 2012 than in the same period last year. In the public sector fewer than half as many homes were registered this year.
The news comes as housing minister Grant Shapps told news agency Bloomberg the government was unlikely to build the number of homes needed. He said: ‘If in the boom we were only building 170,000 - still well shy [of the number of homes needed] - and today we are facing an incredibly tough global economy… if you couldn’t do it then, it’s even harder now.’
Official figures from the Communities and Local Government department published last week showed housing starts in England during the first quarter of 2012 fell by 11 per cent against the last quarter of 2012; from 27,240 homes to 24,140 homes. In the same quarter last year, 28,520 homes were begun. Among housing associations, starts fell from 5,010 to 3,950 - a plunge of 20 per cent. Annual housing association starts fell by 21 per cent from 24,580 to 19,320.
The decline in new projects will be seen as a setback a year into the Homes and Communities Agency’s affordable homes programme, which has pledged to deliver 170,000 new homes by 2015.
Housing demand is widely believed to be at least twice the current rate of delivery. A committee of MPs earlier this month said there needed to be around 250,000 new homes built annually across the UK to meet the increase in household numbers.
‘We are below peak production and that peak production is below demand,’ said Richard Tamayo, commercial director at the NHBC. ‘We’ve got almost no possibility of building the number of houses we need over the next five years.’
Keith Exford, chief executive of 57,000-home Affinity Sutton and chair of the G15 group of London housing associations, said a delay in landlords signing contracts under the HCA’s £1.8 billion programme and uncertainty over its future beyond 2015 had exacerbated the situation in the social housing sector.
‘We’ve had a blip in starts because of the delays on the affordable homes programme,’ he said. ‘The period in which starts will happen is being constrained; people will be reluctant to start beyond mid-2013.’
Mr Exford added that landords would be reluctant to plan new development until the funding regime over the next five years was clear.
The National Housing Federation has called on the government to offer assurances over the future of funding. ‘We are concerned about what will happen with the supply pipeline in 2015,’ said Lucy Thornycroft, interim head of investment policy and strategy at the NHF. ‘There is still no clarity around what kind of support there will be.’
Ms Thornycroft suggested the government could take steps to reassure landlords. These could include an agreement that it will continue to apply the current formula for rent increases until at least 2020 and a guarantee of funding for affordable housing after the 2011/15 programme.
A CLG spokesperson said starts were up compared with 2009 but there was still more to do. He said: ‘Measures include a £1.3 billion plan to get work started on developments and an affordable homes programme set to deliver up to 170,000 homes, while levering in a further £15 billion investment in affordable housing.’