More houses being built is positive but more needs to be done

The latest net housebuilding from the Department of Communities and Local Government are cause for a “collective sigh of relief” but the momentum needs a boost if delivery is to be maintained and increased, according to industry figures.

“It is promising that the number of new homes being built is increasing and we need to boost this momentum quickly if we are to meet Government’s bold, long term target of one million new homes by the end of parliament,” said David Orr, chief executive of the National Housing Federation.

“Housing associations built 50,000 homes last year, 40% of all new homes in England and they are working partnership with Government to deliver thousands of new homes the country desperately needs to end the housing crisis.”

Brian Murphy, head of lending at Mortgage Advice Bureau, said the housebuilding figures will “invoke a collective sigh of relief” in the housing market. “Net supply of homes finally picked up in 2013-14 after five consecutive years of dwindling figures, yet 2014-15 has been an even stronger year, with the supply of homes up by a quarter annually,” he added.

“This has been primarily driven by over 155,000 new build housing completions: by far the highest figure seen in the past six years. With the worst of the recession behind us and the UK economy showing steady growth, the number of new build completions has increased by almost a third since the dangerous lows of 2010-11. Robust growth in housing supply is very welcome as consumer demand – buoyed by record low mortgage rates – shows no signs of abating.

“However, the market is by no means out of the danger zone just yet. The number of housing completions is still far below the amount needed – net supply of dwellings remains 24% below the levels seen in 2007-8 – and we are seeing too many homebuyers chasing a single property. Across the UK there is an ever-growing gap between supply and demand, threatening to drive up house prices and derail affordability. The government must act on its promise to increase housing supply, not only through additional policies like the Starter Homes Scheme, but also by ensuring net supply of housing continues to grow at a strong rate.”

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