Housebuilding starts reach six year high but remain well short of targets

Figures released yesterday from the Department for Communities and Local Government (DCLG) show house building starts in the year to June reached 133,930 in England, their highest in over six years, and a 30 percent increase on the 103,530 started in the previous 12 months.

But while showing the improving conditions for housing development, they still fall well below the pre-recession peak of 170,440 – and the 221,000 new homes estimated to be needed each year (ONS).

80 percent of construction starts came from the private sector, again the highest amount since 2007/08.

Despite the improving economy, house-building conditions remain difficult – with a high land prices, high construction costs and limited development finance all impacting on the financial viability of schemes.

While help to buy and other demand side policies have stimulated demand, they have failed to take into account supply side issues.

In London, 20,270 new homes were started across the 32 local authorities and the City of London, less than half of the Mayors annual target of 42,000 new homes.

Just seven London boroughs accounted for almost 47 percent of starts in the capital.

Southwark, Croydon and Tower Hamlets saw the highest number of private developer starts, at 1,210, 1,700 and 1,100 respectively, and accounted for 30 percent of new private sector starts in London.

Solutions to ease the housebuilding crisis will be discussed in detail next month at RESI 14, the UK’s largest property conference dedicated to the residential sector on the 11/12th September. For more information, please visit:

The full tables released from the DCLG can be found here:

Bruce Ritchie, chief executive officer of Residential Land, said:

“Yesterday’s figures show while we have made some progress on the house-building front, we need to do more to increase housing supply, because until we solve the supply problem, we will not ever get to a ballgame where the demand problem does not create price rises.”

Steve Sanham, Development Director, HUB said:

“Great places are created through passion, care and a real understanding of human values, not by codes and planning regulation. The jump to wholesale, successful, and sustainable, delivery of homes needs to come with a willingness amongst developers to understand, and positively contribute to, the communities in which we develop.”

Godfrey Blight, Capita Asset services said:

“We need to focus on re-investing in the UK’s construction and supply industries, that are still at a vastly lower capacity than there pre-recession peak, and which is pushing up the price of development. Boris’s recent announcement of a £2m investment in apprenticeships was welcome, but we as an industry need to think about how to add to this.”

Ben de Waal, AECOM, said:

“New methods of building will be essential in both speeding up, but also ensuring the quality of new development. Pre-fabricated construction techniques are now unrecognisable to those seen in the 1960’s and can help diversify away from an over reliance on traditional supply chains. These more advanced methods can offer significant programme and cost benefits as well as ensuring high quality.”

Steven Cooper, director of central London residential at BNP Paribas, said:

“Yesterday’s statistics show some improvement but we still are not building enough to ease Britain’s housing crisis, with demand likely to exceed supply for quite some time now.”