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Slump in house building could become critical

The number of applications from builders to start new homes fell by almost two-thirds year-on-year during the three months from November 2008 to January 2009, according to the National House Building Council (NHBC). The NHBC also revised down its predictions for new home starts during the current financial year 2008-09 by 5,000 to 80,000. This would give a figure which is well under half the number of new homes started in the previous financial year.

 

The NHBC said: “In light of these figures, which once again underline the critical state of the industry, we remain of the view that Government intervention, both on commissioning new starts, together with improving liquidity in the mortgage market, is vital.”

 

Plummeting private sector house building means government targets will not be hit

Plummeting private sector house building means government targets will not be hit

Research by the Financial Times published last Thursday shows that public provision of new home starts is already running at 45% of the total. This compares with only 20% towards the end of 2007. Whilst the public sector contribution in terms of total house building has remained reasonably constant, the proportion of public to private sector housing has risen, due to the devastating collapse of the private house building industry.

 

Also, the National Housing Federation (NHF), which represents about 1200 not-for-profit housing associations, has forecast that the number of new homes built in England in 2009-10 could slump to its lowest level since 1921, after revealing that two-thirds of all new properties are being supplied through housing associations. The NHF predicts the number of new homes built in England during the next financial year could slump to just 70,000.

 

The Federation called for the government to fund the building of 100,000 affordable homes over the next two years, at a cost of around £6.3bn, which could save thousands of jobs in the industry. The NHF estimates that housing associations will build up to 45,000 new homes for rent, or low cost home ownership during the coming financial year. However, this is still a relatively small number compared to the forecast waiting list of five million people for affordable housing.

 

The government’s target of 240,000 new homes being built every year by 2016 is just not going to happen. Last year the number of new homes built fell by 33,000 to 142,000 and with the current projected falls the situation is only going to get worse.

 

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