Annual housing starts have slipped below 100,000 once more in a fresh blow to Government housing policy.
The 4% fall in house building to 98,240 in 2011 is a major setback for Housing Minister Grant Shapps who promised to reinvigorate the housing sector after blaming Labour for falling building levels during its time in office.
The disappointing official figures also suggest prospects for a dramatic rise in building activity this year, are not good as housing completions in 2011 were only marginally up, and are hardly enough to tempt the big house builders into opening more sites.
While overall completions edged up 6% to 109,020 in 2011, those delivered by private house builders were only up 1.5% at 82,170.
This points to house builders sustaining the historically poor building levels unless there is fresh impetus.
The figures are a bitter disappointment to contractors and building material manufacturers who are counting on the Government’s promise to push starts to at least 230,000 a year.
The long term outlook for the house building industry now rests on whether the Government’s housing strategy can deliver significant growth in supply and demand this year.
Mike Leonard, Director of the MMA commented that “From the outset the MMA challenged Grant Shapps on the Government’s Housing Policy which he was confident would deliver more homes.
Not only did we deliver fewer homes but we have also seen a significant decline in affordable homes and many smaller households excluded from the market due to lack of financial support from the banks.
“The outlook remains challenging with mortgages in short supply particularly for first time buyers. Many planning applications are being blocked through lack of a cohesive planning policy and the removal of targets. We are also seeing falling consumer confidence and we forecast a massive decline in social housing as a direct result of the massive reduction in grant funding.
Simultaneously we are witnessing our housing crisis develop with high rental costs in the private sector and a growing number of repossessions.
Investing in 25,000 new social homes will begin to address the issue, generate new jobs, maintain our manufacturing capacity and help return our country to economic growth.
Acknowledging Mr Cameron’s stated desire, to “Get Britain Building” our Government needs to take decisive action in the forthcoming Budget and invest in building new homes as the solution to turning around our economic and employment crisis.”
