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House building crumbles

Only 102,570 new homes were completed in 2010, which was 13% down on the previous year, and the lowest level during peacetime since 1923. And, this is at a time when the country is experiencing a severe housing shortage. Projections for the number of new houses needed show that no less than 232,000 new homes need to be built in England every year until 2030 to meet demand.

With less than half of this number currently being built, and five million people at present on Local Authority housing waiting lists, according to The Home Builders Federation (HBF), how is this gap to be bridged?

Housebuilding at record low

The HBF’s responded to this situation by saying:

“Today’s figures reveal the extent of the housing crisis and we need real action now to prevent the crisis deepening.

“The problem is that we have a planning system in the midst of radical change, expensive and unnecessary red tape and a shortage of mortgage availability. If we are going to weather this perfect storm, tackle the housing shortage and produce growth across the country we need early action to resolve and simplify planning, reduce regulation and encourage lenders to lend again.”

This was partly addressed last week as the government released £200m, of £1bn which has been set aside, for their New Homes Bonus initiative. This aims to give local authorities money for each new home they build. The government plans to match the council tax raised through new homes for six years, with councils being given up to 36% extra, for building ‘affordable’ homes. There is also to be an allocation of money when empty houses are brought back into use.

The government believes that an extra 140,000 homes will be built over the next ten years as a result of this initiative.

Grant Shapps, the housing minister said that: “Telling communities what homes they need and where they should be built has had catastrophic consequences. To kickstart a housebuilding revolution, development needs to be backed by local communities rather than opposed by them.”

The response by the HBF was broadly favourable, as they welcomed the proposals, but said “…this alone is no silver bullet and more action is needed.”

A simple look at the figures will show that on the government’s own projections, we are talking about an average of an extra 14,000 homes per year for ten years. But given the shortfall of required homes being built in 2101 of nearly 130,000, this new policy will fall well short of meeting the basic needs.

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