New build completions up 6.4%
Government statistics show new build completions are up 6.4% year-on-year. According to the government’s net additional dwellings data (released in November) new build completions accounted for 195,290 of supply in 2017-18 (up to April) and the supply of new homes is up by 78% in five years.
The Home Builders Federation announced:
“The industry is now on track to smash the target set by government of building a million homes in this Parliament (629k after three years); but is calling on the government to continue to support the whole housing sector if we are to deliver the government’s new 300k target.“
As well as addressing the country’s long-term housing undersupply crisis, (these) numbers emphasise the huge economic benefits house building is now generating. Every home built supports an estimated 3.1 jobs meaning the industry is now supporting over 700,000 jobs – almost 300,000 more than it was six years ago.
In addition, the increases in supply have led to a huge uplift in the financial contributions being made towards local infrastructure and amenities and affordable housing provision. Last year saw developments provide over £6bn in such funding to central and local government– money that would previously have been funded by taxpayers.
“Despite uncertainty over Brexit, the new build market continues to grow, and is now accounting for an estimated 15% of overall housing transactions, up from a long-term average of around 8%.”
James Topping, our Regional Manager, recently spoke to Planning & Building Control Today about how the government’s ambitious house building targets would benefit the build to rent sector, stating:
“In February 2017, the government released a white paper entitled Fixing our Broken Housing Market. It highlighted their commitment to the build to rent sector as not only a way of improving housing supply but, crucially, also as a means to improve choice, quality, security and diversity in the PRS market.”
This year’s figures for build-to-rent development show that the sub-sector has avoided some of the recent fluctuations in the wider housing for sale market, showing strong growth, especially in the regions, where the number of homes in planning has increased by over 30% in the past year.
Predictions for 2019
As we gear up for a busy December at Advantage, we’re also preparing for another busy year ahead for our clients. Global auditor and service company KPMG have stated that uncertainty associated with the Brexit process, coupled with rising interest rates on the horizon, could trigger further adjustments in house prices and moderate growth in most regional markets over the short term. The after-effects of the changes made to stamp duty in 2016 are also likely to affect the growth in the market over the next couple of years. However, KPMG’s projections suggest property prices will start to pick up by 2019, and London will be the driving force behind growth in the market by 2021.
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