More new homes being built in England but still some way off Government target

Over 222,000 new homes were built in 2017/2018, a rise of 2% to the highest level in all by one of the last 31 years, official figures show.

But the data from the Ministry of Housing, Communities and Local Government (MHCLG) reveals that the target of 300,000 new homes by the mid 2020s is still some way off and experts point out that it is not rising fast enough.

However, Housing Secretary James Brokenshire welcomed figures and pointed out that the total number of additional homes delivered since 2010 is now 1.3 million.

‘The figures demonstrate more desperately needed homes are being delivered, a vital step in ensuring the housing market works for everyone, and that we are on track to deliver 300,000 homes a year by the mid-2020s,’ he said.

He also pointed out that the annual increase follows significant Government reforms, including more streamlined planning rules and more investment into the Affordable Homes Programme.

‘To ensure we continue to build the homes needed, the Government has a comprehensive programme of targeted investment, planning reform and other measures. This includes removing the biggest barrier to councils building homes, the Housing Revenue Account borrowing cap, freeing up councils to deliver a new generation of council housing, up to an estimated 10,000 homes a year,’ he explained.

However, Grainne Gilmore, head of UK residential research at Knight Frank, pointed out that the delivery of new homes, including new build housing, conversions, and change of use, has climbed every year since 2012, with new house building alone up 65% over the same period and the number of new homes built in 2017/2018 was 6% higher than the previous year.

However, she also pointed out that net additions are still around 26% lower than the Government’s target 300,000 annual target. ‘While more timely data capturing energy performance certificates (EPCs) granted to new homes suggest a continued pick-up in activity this year, separate housing starts data, which captures information on new homes being started on site, shows a moderation in activity, which could weigh on housing completions in 2020/2021,’ Gilmore said.

‘There is also a headache for policymakers in London, with net additions in the capital falling by 20% over the year. Only 12 of the 33 boroughs in the capital reported a rise in the number of new homes provided in the year the March,’ she explained.

‘The EPC data suggests there has been a pick-up in activity since March, but the overall data shows that current planning policies have put a dampener on development, at a time when the housing need in London is growing,’ she added.

Others also suggested that the figures are not as positive as the Government might want them to be. Joseph Daniels, founder of modular smart homes developer Project Etopia, said that the rate at which new homes are being built has almost halved in the last year.

‘Failing to maintain the building rate from one year to the next is an unsustainable policy. The growth rate in the number of new homes being built has fallen from 11.9% in 2016/2017 to 6.4% in 2017/2018,’ he pointed out.

‘Despite the desperate need for new housing, fewer homes became available in 2017/2018 than 10 years ago. Clearly the political capital that has been invested in talking about solutions to the housing crisis is not translating into working capital on the ground,’ he added.

‘A fresh approach to house building is needed, along with a greater sense of urgency to ensure people are provided with quality accommodation in the future. Councils can look to innovative modular homes, which are high quality and, more importantly, can be built extremely quickly, as a way to catch up to their house building targets,’ he concluded.

Mark Dyason, managing director of specialist finance broker Thistle Finance, described the annual rise as ‘negligible’ and reckons that house builders and would be-buyers alike are nervous about what the fallout from Brexit could be and that’s hit the number of net additional dwellings hard.

‘The fact that the number of new homes being built as a result of permitted development rights also fell sharply will be a particular blow to the Government. Permitted development rights were meant to ignite the UK house building market but on this evidence are already starting to fizzle out,’ he explained.

‘The irony is that there has never been a more competitive and dynamic borrowing environment for developers. There has been an influx of new lenders and challenger banks into the development sector over the past two to three years. This has brought rates down and offered greater choice to developers, both large and small,’ he added.

Blane Perrotton, managing director of the national property consultancy and surveyors Naismiths, also believes that the sharp fall in the number of changes of use made under the new permitted development rights is an issue.

‘These new rules, which make it easier to convert existing property into housing, were supposed to be the white knights of home creation. On this evidence they are failing to deliver on their promise, and the overwhelming number of new homes created are being built from scratch,’ he said.

‘All the more reason for the Government to inject a shot adrenalin into the planning process. Failure to do so will ensure its target of 300,000 new homes a year remains a pipedream,’ he added.