Housebuiling slumps to 77-year low
THE number of new homes being built has slumped to its lowest peacetime level for 77 years. Excluding the war years of 1940 - 46, government figures reveal less new homes were built in 2001 than in any year since 1924 and showed a fall of almost five per cent over the previous year.
Housing completions statistics from DTLR for the first 10 months of 2001 reveal private completions were four per cent down on the same period last year and social completions down six per cent. This points to a year-end total of 162,000 while the total for 2000 was 169,100.
The collapse comes at the end of a period of exceptionally high household growth. Currently, 40,000 more new households are being formed annually than there are new homes to accommodate them.
Public house building has effectively ceased and private house building is expected to decline further due to planning restrictions.
Whilst the Governments principal housing policy initiative (PPG3), aimed at reducing greenfield development and increasing the use of brownfield land, is being hailed as a success, some local authorities are using the guidance to delay or scrap projects.
The Government`s Planning Green Paper, launched in December, could further reduce total housing output by subjecting developers to increasing planning gain demands (effectively a land development tax) in exchange for planning permission.
As the gap between supply and demand increases, house price inflation is expected to escalate further increasing the difficulty of the low and middle-paid to buy homes.
A spokesman for the House Builders Federation said: The cause is three-fold: investment in public housing has fallen steadily since the 1070s. At the same time greater planning restrictions on the use of land for private house building have reduced the ability of developers to make up the shortfall. Now with increasing planning gain demands, developers are being taxed for the privilege of trying to build the homes this country so desperately needs.
The consequences are already being felt and are set to worsen. The rise in single-person households will exacerbate the problem. Government initiatives to help key workers buy homes of their own - including the recently launched Starter Homes Initiative - have received a great deal of publicity. Unfortunately such mechanisms cannot tackle the fundamental problem of too many people chasing too few homes. Cash help being offered to teachers and other key workers, is a short term solution, which can only create further house-price inflation.
There is no quick fix to this. Only by allowing supply to match demand can the aim of a decent home for all be achieved. Failure to achieve this will exacerbate the number of people living in over-crowded or unsuitable accommodation - a situation that is provoking serious social and economic problems."
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