The latest housebuilding stats show progress, but not enough, according to industry players. “The modest pace of the improvements is a concern,” said Rod Lockhart, managing director at online mortgage lender LendInvest, said. “At the current rate, we will fall well short of the government’s target of one million new homes by 2020, and fail to make inroads into the sharp housing shortage in the UK.”
However, many argue that any growth, however modest, is something of a triumph in an uncertain market. “The referendum result will test the nerve of housebuilders, but it’s clear that since June the impact on economic confidence has been less than expected, with consumers continuing to spend and a housing market flat-lining rather than falling,” said Paul Smith, CEO of haart estate agents.
“Now that interest rates have dropped, it won’t be long before things pick up again and house-hunters hungry for the first home will be looking to take advantage,” he added.
Andy Hill, Chief Executive at Hill, agrees that any progress is encouraging in the current climate. “It’s encouraging to see housebuilding is on the up, as the latest DCLG figures show private housing starts increased four per cent in Q2 compared to the previous quarter,” he said. However, everyone agrees that there is much more to be done.
“The country is facing a major housing shortage, and it is more important than ever that the government supports both first time buyers and housebuilders in the coming Autumn Statement, so that we can continue to build more new homes and get more people on to the housing ladder,” said Hill.
According to Lockhart, supporting smaller developers is key to building picking up the pace of construction. “The onus is on the Government to jumpstart the housebuilding industry,” he said. “The large housebuilders are not keen to do more, so efforts must be focused on small and medium-sized builders.
“The rumoured £5 billion Home Building Fund is a good start, but finance is not the only area holding these builders back. More has to be done to reduce the complexities of the planning system and open up access to land to build on.”
According to the Local Government Association, local councils should be allowed a greater role in housebuilding. “Councils and the Government both share the same ambition to build more homes,” said Cllr Martin Tett, Housing spokesman at the Local Government Association. “Bold new action is needed to solve our housing crisis and a renaissance in house building by councils must be at the heart of this.
“We need to be building up to 250,000 a year to tackle our housing crisis. The private sector clearly has an important role to play but these figures only serve to confirm that they cannot build the homes we need on its own, and will likely be further restricted by uncertainties in the months and years ahead.
“Councils want to get on with the job of building the new homes that people in their areas desperately need.
“If we are to stand any chance of solving our housing crisis, councils must be able to replace sold homes and reinvest in building more of the genuine affordable homes our communities desperately need now more than ever.”
Smith emphasised that the government has a responsibility to ensure that housebuilding prospers, and that construction cannot afford to slow down until a deal is struck over Brexit. “We also have a new government committed to ensuring that housebuilding prospers, and so housebuilders should not hesitate to act now,” said Smith. “If housebuilding slows in Q3, this will only exacerbate the housing shortage when the market does spring back to life.
“It is up to the government and the Mayor of London to ensure that housebuilding remains attractive, so as to safeguard investment in new sites and provide the new homes that are so clearly needed.”