House starts continue to rise but figures paint patchy picture

Government figures released last week have revealed a continuing rise in residential supply in England

Housing starts were up 63% in the three months to the end of June, following a 13% rise in the previous quarter.

From a low point of 16,210 in the final quarter of 2008, there were nearly 30,000 starts this quarter. Much of the growth was in the private sector, although the figures revealed the highest-ever quarterly starts by registered social landlords.

Gerald Eve partner Peter Dines said: ‘While the news is very positive for social landlords, it is interesting to note that their performance in London has significantly slowed in comparison with all other regions.

‘This supports mayor Boris Johnson’s claim that London is being short-changed by the government as it channels housing funds away from the capital.’

John Stewart, economic affairs director of the Home Builders Federation, said the overall figures showed that housebuilders’ confidence is gradually returning, but added that a sustainable recovery will depend on the banks returning to ‘more sensible’ levels of mortgage lending.

‘The government also needs to address continuing shortages of permissioned land and the cost impact of regulation and policy on development viability – both major barriers to a sustained recovery in housebuilding,’ Stewart concluded.

The picture varies across the country. A 116% increase quarter on quarter helped the south-east reverse a 12-month trend of falling housing starts and London starts were up 12% on last year’s June quarter, the largest rise in the country. Starts in the West Midlands also increased year on year, but all other regions were down in comparison with last year.

Nicholas Leeming, director of estate agents’ portal, said: ‘The rebound in housebuilding still leaves us around 100,000 homes below the government target and well below the growth in the number of households.

‘Britain is heading for a real housing supply crisis as the number of homes falls increasingly behind our housing needs.’ (Property Week)

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