The data from the Department of Communities and Local Government (DGLC), shows that there were 35,530 house building starts in England, down 3% when compared to the final quarter of 2015.
Completions were estimated at 32,950, some 9% lower than the previous quarter and 3% lower than a year ago while annual housing starts totalled 139,680 in 2015/2016, up by 12% compared with 2014/2015. This highlights that the first three months of 2016 saw a slowdown’
A breakdown of the figures show that private enterprise housing starts were 3% lower in the March quarter of 2016 compared to the previous quarter whereas completions were 7% lower. Starts by housing associations were 9% lower compared to the last quarter and completions 24% lower.
Overall starts are now 107% above the trough in the March quarter of 2009 but 27% below the March quarter 2007 peak. Completions are 33% above the trough in the March quarter 2013 and 32% below their March quarter 2007 peak.
Starts were broadly steady from 2003/2004, averaging around 44,000 units each quarter until late 2007. Starts were strongly affected by the economic downturn from the start of 2008 when there was a period of rapid decline to a trough in the March quarter of 2009.
Completions increased gradually from 2003/2004 reaching a similar level to starts by 2007. Completions fell more slowly than starts during the downturn, but over a longer period.
The data reveals that from 2009 starts began to recover and during the next two years both series converged and levelled out. More recently, despite fluctuations, starts and completions have started to grow again gradually.
The slower start to the year is echoed in figures from the National House Building Council (NHBC) which show a fall of 8% in new home registrations with the NHBC over the past three months compared with the previous three.
During the quarter there were 25,133 new home plots registered in the private sector, a 10% decrease compared to last year’s 27,809. In the public sector there were 8,118 new homes registered, which is a 3% decrease compared to last year’s 8,402.
However, there was an increase in February. The 12,181 new homes registered in February 2016 was 4% higher than in February 2015. February’s total was made up of 9,632 private sector homes and 2,549 from the public sector. Growth came entirely from the private sector which saw an increase of 6% compared to the same period last year.
There were 33,251 new home registrations in the rolling quarter December 2015 to February 2016, fall of 8% on the same period 12 months ago. By contrast, the number of completions continues to rise, up 6% on the same period 12 months ago.
As the leading warranty and insurance provider for new homes in the UK, NHBC's registration statistics represent approximately 80% of the market.
‘February’s new home registration figures demonstrate steady levels of house building activity. Despite a slow overall start to the year, industry confidence remains high and house builders are progressing well with their plans for growth in 2016, as seen by the increase in the number of new home completions,’ said NHBC chief executive Mike Quinton.
According to Jan Crosby, head of housing at KPMG, London’s recent Mayoral Election highlighted the concerning on-going housing crisis in the capital, but the house building statistics for the first quarter of 2016 should extend that concern countrywide.
‘While undoubtedly some will point to a 12% rise in completions annually, drops across the board cannot be ignored, especially given annual starts have increased by just 1%,’ said Crosby.
‘These statistics are down to the fact that not enough is being done to fix the broken housing market. We are still only seeing around 140,000 homes being built per year, over 100,000 less than we need,’ she pointed out.
‘And at the rental end of the market, the picture is even more worrying as completions by housing associations fell by 24% last quarter on the previous, showing the effect of recent cuts to their revenue streams and a likely knock on to housing some of our society’s most vulnerable,’ she explained.
She believes that there has perhaps been too much emphasis from the Government in terms of pushing ‘Generation Buy’ and the demand side measures such as Starter Homes and the Help to Buy ISA to back it up.
‘Focus on supply is not where it needs to be. Along with the sector’s calls for changes to planning laws, large scale release of public land and more investment, more innovative solutions are needed,’ Crosby added.
‘A holistic approach to infrastructure and housing provision, developments featuring a true mix of multiple tenures, and place making solutions to create workable developments where people can live, work and play. Hopefully these statistics will raise the alarm again and persuade the Government that housing needs to be higher on its agenda,’ she concluded.
