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Number of new homes being built in England falls by 11%

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.

And work was started on just 98,280 properties in 2012, one of the lowest totals in recent years, the data from the Department for Communities and Local Government (DCLG) shows.

This compares to a recent high of 183,000 housing starts in 2006, but numbers have fallen since the credit crunch to a low of 75,000 in 2009. The numbers recovered slightly but have now fallen back again.

The figures are regarded as disappointing as the government is currently trying to boost the number of new homes with a number of key schemes but the data suggests these are not yet having an effect.

However, Simon Rubinsohn, chief economist of the Royal Institution of Chartered Surveyors (RICS), said that the figures demonstrate the scale of the problem facing the country in delivering sufficient homes to accommodate a rising population but he believes output will increase this year.

‘Weakness was visible in all sectors although the biggest decline was from housing associations which saw a drop in starts of more than 20%. RICS expects the volume of activity to increase over the coming quarters helped by some of the measures introduced by government. A slightly more positive tone is also visible in the results of the latest RICS Construction Survey,’ he explained.

‘However, even allowing for this, starts are only likely to reach 115,000 this year which is way short of need. This imbalance between demand and supply is likely to continue to underpin the relative resilience of both house prices and rents,’ he added.

The British Property Federation said the country needs to end its obsession with owner occupation and consider a range of housing options, including build to let.
 
The BPF has been calling for the expansion of an institutionally funded private rented sector, which could bring badly needed new funding to develop quality homes for longer term rent, and meet some of the shortfall in housing building.

‘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,’ said Ian Fletcher, director of policy at the British Property Federation.

‘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. An institutional funded professional rented sector, building to let, ticks all these boxes,’ he pointed out.

A spokesman for the DCLG pointed out that some £19.5billion in public and private funding is being invested in an affordable housing programme that is set to deliver 170,000 homes and £1.3billion is being used into unlocking stalled sites.

He added that the Funding for Lending scheme is helping improve the access to and availability of mortgages, while the FirstBuy and NewBuy schemes are helping thousands of people buy newly built homes with a fraction of the deposit they would normally require.

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