UK New Homes lowest in five years
The government’s own target of building 300,000 new homes per year is proving difficult to meet with the year to March ‘21 showing an 11% drop to just 216,490. This is according to the government’s own Department for Levelling Up, Housing and Communities and is the lowest number of new homes being built since 2015-16.
Many reasons have been sighted for this shortfall with the COVID pandemic playing a major part with sites closing down immediately in March 2020 – a restart did begin in May 2020 but three months had already been lost.
Add to that the soaring cost of materials and overall availability and the fact that some developers are scaling back due to skyrocketing costs and reducing profits and the evidence is clear as to why this has happened.
So how can house builders get back on track and ensure they are meeting the targets set by the government?
Neil Gosling, head of residential development, comments, “There has been much talk and a promise of planning reform to bring additional sites forward for development in recent years. This is crucial to the supply but we also need to see the time involved in securing planning and the commencement of actually breaking ground significantly reduced.
Land values are significantly increasing due to developers having land shortages due to a lack of activity during lockdown. This is causing developers to have to revaluate their profit margins, effectively reducing them, to secure sites for development.
And while COVID impacted the development programme, a very real issue is likely to be a skills and materials shortage as developers catch up.”
The need and desire for affordable new homes remains a top priority for the government. The sector now has to catch up and deliver.
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