It is no secret that the UK is suffering a severe shortage of housing. As the 2015 election arrives, political parties are positioning themselves as the group to get Britain building again and boost falling rates of howeownership. The coalition government has already stimulated construction activity significantly, thanks to the Help to Buy lending schemes, which have helped to open up the bottom of the property ladder to first time buyers, driving up demand for new build homes.
“The introduction of the government’s Help to Buy equity loan scheme has been instrumental in increasing construction levels of new-build properties, with DCLG data showing new build completions were by far the biggest component (95%) of housing supply in 2013-14. The scheme has increased demand for new homes as well as providing funding for builders, who can now invest in this type of construction with confidence,” explains Andy Frankish, New Homes Director at Mortgage Advice Bureau.
Indeed, this year marks a positive step in the race to recover the chronic shortfall in accommodation, as new figures from DCLG reveal that the annual net housing supply in England has increased for the first time in six years.
The annual housing supply in England amounted to 136,610 net additional dwellings in 2013-14, an increase of 10 per cent from 2012-2013. This rise in the number of homes was primarily fuelled by construction, with 130,340 new build homes completed. The rest comprised of additional homes from conversions (4,470), buildings having their usage changed (12,520) and “other gains” (1,330), all of which offset the loss of 12,060 homes through demolition.
Frankish forecasts the current demand for new build homes to continue: “Current lending conditions are putting potential buyers at a great advantage: mortgage lenders have regained a strong appetite for business and fierce competition within the market has resulted in a record number of mortgage products. Rates are also at an all-time low, and with the Bank Rate not expected to increase until autumn 2015, demand for house purchase is likely to remain strong.”
However, he notes that there is still “some way to go” before the sector reaches pre-recession levels of house building. Others have raised concerns recently that construction activity is set to slow, due to a range of other factors, such as a shortage of skilled workers.
“While some problems – such as a lack of skilled workers and building materials – have no quick fix, the construction industry must remain dedicated to building new homes if we are to meet consumers’ housing needs,” Frankish concludes.
Source: The Movechannel