Housing starts fall to lowest post-war level
Tuesday, 17 Jun 2008 06:35
Housing starts fall to lowest post-war level
The supply of new-build properties started in the UK has fallen to the lowest level since 1945, according to the Construction Products Association (CPA).
Research from the organisation – which represents the UK’s manufacturers and suppliers of construction products – finds there were little more than 147,000 new housing starts in Great Britain this year - a fall of 27 per cent from the levels in 2007.
Furthermore, private sector housing starts are forecast to be down by 30 per cent to the lowest level since 1992, while the social housing programme is failing to grow in line with government’s plans for 45,000 new homes a year by 2011.
The research supports that of the Office for National Statistics (ONS), which finds
new-build property starts were severely depressed in April.
CPA forecasts now expect the construction industry as a whole to shrink by 1.3 per cent during the course of 2008.
This is despite lucrative infrastructure contracts – including the Building Schools for the Future programme and projects for the 2012 London Olympics – bolstering demand.
Growth in these sectors is, however, more than outweighed by the decline in the housing market, a sharp fall in investment in new industrial buildings, and reduction in the repair and improvement to existing social housing.
"The impact on the new build housing market has been more severe than any of us anticipated," said Michael Ankers, chief executive of the CPA.
"To be starting fewer new homes than at any time over the last 60 years illustrates the scale of the problem we now face, especially given recent reports from people like Kate Barker that we needed to increase the number of houses that we build.
"Unless something is done urgently to address this problem, the capacity in the industry will be cut to a level which will take a long time to build up and it will not be able to meet the inevitable pent up demand for new housing," added Mr Ankers.
Government targets seek the construction of two million new homes by 2016, with a million carbon-neutral properties added by 2020.
However, these targets appear compromised by the continued downturn in the UK property market.
"We have been warning for months of the dangers of allowing this downturn to continue," said Stewart Baseley, executive chairman at the House Builders' Federation (HBF).
"Today’s report is further evidence of the urgent need to get some confidence and fluidity back into the housing market.
"If the government wants to deliver the homes the country needs, and to avoid the housing market dragging the wider economy into recession, it must act now."
Chris O'Toole