Statistics for new house building show there was an 11% collapse in the number of new home starts last year.
Annual housing starts in England in 2012 totalled under 100,000. The figures include both private and social housing.
Altogether, there were 98,280 starts – down 11% on 2011, and 45% below the March quarter peak of 2007.
Completions in England were 42% under the 2007 peak and came to 115,620 – although this was 1% up on 2011.
The figures have met with a horrified reaction.
Simon Rubinsohn, RICS chief economist, said: “These figures demonstrate the scale of the problem facing the country in delivering sufficient homes to accommodate a rising population. In the final three months of last year, less than 27,000 new houses were started in England alone, leaving the final figure for the whole of 2012 below 100,000.
“Weakness was visible in all sectors, although the biggest decline was from housing associations which saw a drop in starts of more than 20%.”
The RICS is predicting an uplift this year, but to only 115,000 starts which Rubinsohn said was “way short of need”.
The British Property Federation said the figures showed that the UK needs to end its obsession with owner occupation and consider a range of housing options, including the rapidly growing build-to-let market.
It said the UK is only building half of the homes estimated to meet demand, despite a raft of Government initiatives aimed at kick-starting house building.
Ian Fletcher, director of policy at the British Property Federation, said: “Against the backdrop of these figures we need to seriously think about how we’re going to build the homes this country needs to meet growing demand.
“As things stand, the owner occupied model just isn’t delivering the required numbers, and we need to focus on a range of options.
“To improve overall housing supply it needs to be affordable, does not require access to mortgage finance and not put undue strain on tight public finances.”
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Comments
Exactly profits are up so why would the builders build for demand and risk reducing the average price and therefore profits.
Unless the government introduce something radical like LVT which would see land banking by the big housbuilders punitively taxed, expect this to continue.
Can anyone tell me what "affordable housing really means" when politicians say thats what they are trying to achieve?
They won't build the number of homes 'needed' because there's no 'demand' (in the economic sense) for that number of homes at todays inflated prices.
The volume builders are a classic OPEC-style cartel, restricting supply to manipulate prices and maximise paper profits.
If we had a free market economy, the right number of homes would be built, supply and demand would be in equilibrium.......and prices would be about 30% lower than they are today. That's why this supposedly Tory-led coalition doesn't want a free market economy, and neither do their paymasters in the building and banking rackets.