Slowdown in house building causes FTB concern

All new work decreased by 0.6%, while repair and maintenance decreased by 1.4%. All work types reported decreases, including private housing by 2.7% and public housing by 2.2%.

Year-on-year, output in the construction industry showed a decrease of 1.3%. Repair and maintenance fell by 4.3% while all new work increased by 0.5%.

Comparing the 3 months, December 2014 to February 2015, with the previous 3 months, September to November 2014, construction output fell by 3.2%. Repair and maintenance and all new work decreased by 7.7% and 0.3% respectively.

Andrew Bridges, managing director of estate agents Stirling Ackroyd, commented:

“We’ve hit a crunch point for new homes. Monthly and yearly falls in housing construction are a sign that we’re heading in the wrong direction. It’s simple: we need more places to live, and they aren’t being built quickly enough or widely enough across the UK.
 
“This is nowhere clearer than in London, where our recent research demonstrates how the capital simply cannot meet its housing targets with the current rate of planning permission for new homes. Whoever makes it in to Number 10 after the General Election needs to realise that the housing shortage isn’t just a matter of loan rates and regulation – it’s a matter of bricks and mortar. The demand is there. It’s time to step up supply.”

Andy Frankish, New Homes Director at Mortgage Advice Bureau, added:
 
“The slowdown in private housebuilding for a fifth successive month will do nothing to ease first time buyers’ fears that affordability pressures are here to stay unless politicians take decisive action. Short term schemes to help with deposit savings and mortgage access are all very well, but we also need a long term commitment to new ways of increasing housing stock.
 
“One of the big difficulties is that the planning system is not being used to its full potential. Many smaller developers simply do not have the time and resources to prosper through the speculative housebuilding model, which – for all the efforts of the bigger firms – is holding back total output.
 
“If we are serious about hitting housebuilding targets, we cannot expect to rely solely on larger builders spending heavily on land and battling the system to secure planning permission. We need to complement their efforts with new, innovative thinking and by increasing support for options like custom build. This can help smaller developers to contribute more, by giving them better access to finance and cutting out the high marketing costs often associated with new build homes.
 
“There is no single solution to the housing crisis, but through better use of the planning system, custom build can make a far bigger contribution to new housing stock. The low risk associated with this type of home is very attractive to mortgage lenders. With greater backing and favourable planning consent, custom build can introduce a high number of plots to the market in a short space of time.”