Annual housing starts rose by 15 per cent and quarterly housing starts (for the second quarter) hit a record high, according to new government figures.
Housing Today reported that: The number of homes registered as starting on site in the three months to June leapt 21% to its highest level on record, in official figures based on building control data.
The numbers, which the government calls “indicators of new supply” because it doesn’t see them as reliable enough to call them official housebuilding statistics, showed that 51,730 homes were started in the second quarter of the year, seasonally adjusted, up 21% on the first quarter, and up 15% on the same quarter in 2021.
Quarterly starts 6% above the previous peak
The figures also put the quarterly starts 6% above the previous recorded quarterly peak, seen in the first quarter of 2007, just prior to the global financial crisis.
Although the level of housebuilding starts may be an encouraging sign for the future, there are still widespread reports of a shortage of properties available to buy or rent. Earlier this month, Advantage looked at how the shortage of available housing is continuing to drive up prices.
An end to housebuilding targets?
Mortgage Solutions quoted Malcolm Davidson, director of the Hull-based broker UK Moneyman, who said: “One major worry is that our new PM seems against the very idea of housebuilding targets. Whatever your political persuasion, though, our population is growing exponentially but housebuilding hasn’t kept up and we have seen property prices rise in the region of 20 per cent since Covid alone.
“This is simply not sustainable if we want to continue to be a nation of homeowners. What we need is a clear vision and plan, utilising all available new technologies to enable the UK to embark upon a long period of building the homes we desperately need, including re-purposing buildings in our crumbling city centres.”
Mortgage Solutions also quoted Rhys Schofield, managing director at the Belper-based Peak Money, who commented: “If you cut through the numbers that look big on paper, the UK needs to build 340,000 new homes a year until 2031. The government’s own target is 300,000 a year. These latest numbers all fall well short, meaning that house prices can only be forced in one direction. With the lack of urgency around housebuilding, having a place to call your home is becoming increasingly out of reach for many people.”
Advantage’s view: Although the latest housebuilding starts data looks encouraging, many within the property sector will still hope for added input from the government to give a further boost to housebuilding, helping to tackle the current property shortage. However, according to i: “Planning laws are set to be overhauled by Liz Truss to end central housebuilding targets and let local communities approve new developments more easily.” It remains to be seen whether local housebuilding targets may be implemented as an alternative to national targets.