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Further Action to Instil Confidence in New Build Sector by Government

Creative abstract house building and city construction industry concept: summer outdoor urban view of modern real estate homes

According to the Ministry of Housing, Communities and Local Government’s Statistical Release, new build dwelling starts in England were predicted at 39,350 in the most recent quarter. This is a 5% decrease in comparison to the previous three months, in addition to an 8% decrease on a year earlier.

All starts are now 109% above the trough in the March quarter 2009 and 14% below the March quarter 207 peak. All completions are 50% above the trough in the March quarter 2013 and a 9% below the March quarter 2007 increase.

Executive Director of the Intermediary Mortgage Lenders Association (IMLA), Kate Davies, commented:

“The number of new homes still falls short of the volume needed to meet the UK’s chronic housing shortage. Additionally, when looking at the data over an extended period of time – it is clear that quarterly housing starts remain well below pre-financial crash year. The number of housing completions is at its lowest since Q1 2016, despite ongoing policy pledges to mend what the government has itself described as the ‘broken housing market’.

“To have any hope of rebalancing the relationship between housing supply and demand, the government must do more to instil confidence in the new build sector. There has been a commitment to improve access to mortgage finance, and IMLA’s data suggests that first-time buyers are faring better than any other customer group in the market. Nine in ten applicants (90%) via intermediaries secured a mortgage offer in the first quarter of 2018, suggesting that a shortage of products is not the issue.

“However, what is needed are measures to support the full housing spectrum, not just first-time buyers. We’re faced with an increasingly illiquid market, with homeowners now only moving once every 19.2 years, compared with every 7.4 years in 1988, as price inflation and a lack of suitable options mean many ‘steppers’ struggle to find homes to meet their changing needs, such as a growing family or getting older.

“This lack of new homes coming onto the market organically means the new build sector must continue to be supported. As a starting point, we need clarity over the next phase of policies once the current Help to Buy scheme comes to an end in 2021.”

Em Morley:
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