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House Building Rate Hits a Decade-high

Official figures reveal that the house building rate hit a decade-high in 2017, prompting the Government to declare that it is on track to achieve its goal of delivering 300,000 new homes a year by the mid-2020s.

The data indicates that 222,190 new homes were built during last year, the highest level since the 2007/2008 peak and an increase of 2% annually.

The additions consist of 195,290 new builds, 29,720 change of use properties, 4,550 conversions, and 680 other property gains. The total gains were offset by 8,050 demolitions.

Housing Secretary James Brokenshire said that the figures are encouraging and confirm another annual increase in the number of new properties delivered, but the government is determined to do more to ensure that needed homes are delivered.

The Housing Secretary said that this is why an ambitious target of 300,000 homes a year by the mid-2020’s has been set, This includes changing the planning rules, investing over £44bn, and eliminating the borrowing cap so councils can produce more homes.

The yearly supply growth rate remains down compared to 2016/2017, when supply was up by 15% and has slowed to its lowest total since 2013/2014 when a boost of 10% was recorded.

Naismiths managing director Blane Perrotton said that since Brexit made UK construction hesitate, housebuilders have prided themselves on keeping things running at home.

He pointed out that as other sectors slowed down, housebuilders remained busy during the housing crisis. The confirmation that the house building rate in 2017-18 saw more completions than at any other point in the decade was prideworthy for a sector that responded energetically to increased demand.

Mr. Perrotton did indicate that the speed of growth has fallen from 25% in 2014-15 to only 2% last year. He blamed weaker demand and reduced developer confidence since Brexit.

Knight Frank head of UK residential research Grainne Gilmore said that net additions remain approximately 26% lower than the 300,000 annual target set by the Government.

The number of Energy Performance Certificates issued to new homes is indicative of a sustained increase in activity, but other data that collects information on new properties being commenced on site show moderate activity,

There is also a challenge for London policymakers, with net additions in the city sinking by 20% over the year.

Home Builders Federation executive chairman Stewart Baseley said that while wider economic uncertainty has slowed down the second-hand market, the presence of Help to Buy to enable first-time buyers to buy newly constructed homes have motivated builders to invest and increase the house building rate.

Mr. Baseley said that the increases are both providing new homes and boosting the national economy. Thousands of new jobs have been created by house building sites, which have also contributed billions towards improving communities and local infrastructure. He said that the Government still needs to work with the housing sector to help it deliver more homes if the 300,000 target is to be reached.

Source: CRL