ROOF Blog

Housing statistics for the final quarter of 2008 show a record low for the number of new homes being built. Housing starts (the number of private new homes under construction) were down 58 per cent from Q4 of 2007. Private enterprise housing starts were 64 per cent lower than the December quarter of 2007, with annual housing starts figures for England continuing to decline, totaling 105,000 in 2008, down some 37 per cent compared with 2007 and 43 per cent below their 2005-06 peak. Chairman of the Local Government Association housing board, Cllr Paul Bettison, said: ‘The slowdown in private sector house building will eventually affect the amount of affordable housing that is being built. This will mean fewer new social homes at a time when there will be more demand for them.’

Applications to build houses across the UK rose in the last quarter of 2009, according to the NHBC. It said applications to build new homes between October and December 2009 rose 64 per cent from 15,879 to 26,078 compared with the same period in 2008. This was driven by the private sector, where applications surged 113 per cent, from 8,646 in the last quarter of 2008, to 18,393 in 2009. Public sector demand saw a six per cent rise, from 7,233 to 7,685. Imtiaz Farookhi, chief executive of the NHBC, said: ‘Our house building colleagues across the industry have shown cautious optimism as they reveal their predictions for 2010. Now the nation’s housebuilders need support from the government as they see their way out of this downturn and try to meet the need for new homes.’

Britain is unlikely to return quickly to the peak rate of housebuilding during the boom of the past decade, the chief executive of Taylor Wimpey has said. Despite reporting a rise in demand for new homes that was better than expected - running at nearly a third higher than the dark days at the end of 2008 - Peter Redfern said that planning requirements would hold back a wholesale recovery in building volumes. Mr Redfern said: ‘At the peak, the industry in the UK was building 170,000 units. That has halved and last year the industry completed around 85,000 to 90,000 units. It will be a very long time before we get back to those high volumes because of the constraints on land availability and the planning system.’

The Homes and Communities Agency (HCA) has shortlisted 265 bids totalling nearly £550m in round two of its Kickstart housing delivery programme.

Shortlisted bidders include a mix of RSLs along with national and local developers aiming to unlock up to 22,000 homes across the country.

Bidding opened in September with the criteria that eligible schemes should be housing-led with a minimum of 50 homes (fewer in rural areas or if the scheme delivers to Code for Sustainable Homes Level 5 or 6) and that sites should have detailed planning consent in place or the ability to achieve this by the end of March 2010.

Sir Bob Kerslake, HCA chief executive, said: ‘Kickstart continues to be a crucial component in maintaining momentum in the house building industry.’

A due diligence process will now follow, which will look in detail at value for money, design, financial viability and risk, as well as an assessment of quick delivery.

Nine new locations have been given permission to proceed with developing plans for new settlements which meet environmentally-friendly standards, and will receive a share of £5 million in Government funds.

To qualify to become an eco-town a development must have 5,000 homes, at least 30 per cent of which should be affordable for those on low incomes, and contain low-carbon services, buildings, transport and energy.

Shoreham Harbour and a second site in Northstowe, Cambridge, have already begun development and will be redesigned to meet higher levels of sustainability.

Five more local authorities are seeking to set up potential eco-towns across 10 locations.

Evidence is growing that the worst is over in the recession-hit property market following a string of cautiously optimistic assessments from the UK’s leading housebuilders.

Persimmon set the tone this month when it predicted a moderate recovery. Barratt, the UK’s largest housebuilder, and Bovis Homes echoed that sentiment with similarly upbeat forecasts.

The number of new homes being built rose to its highest level for over a year in the three months to October, with work starting on 25,000 new properties, an increase of 27 per cent compared with the same period last year.

However, housebuilders are reluctant to be too bold over the prospects of a sustained recovery because of the fragility of the market and the uncertainty over the continuing availability of mortgages.

‘We are way ahead of where we were this time last year, but we’re not out of the woods yet and there could still be plenty of problems for the industry were the banks to pull back lending,’ said Bovis’ chief executive David Ritchie.

Conservative councils are less likely to grant planning permission for new homes than other local authorities, according to research by McGrigors, the commercial law firm.

The gap is not large – 63 per cent of applications were approved by Tory-controlled councils compared with 69 per cent in authorities under Labour, Liberal or no overall control.

But given that the Conservatives control half of all councils with planning permission powers and are likely to make further gains in elections in May, the outlook could well be an even more severe housing shortage in the long-term, the law firm said.

On top of that, Conservative control is most heavily concentrated in the south-east where housing shortages are most acute.

Six of the 10 local planning authorities with the lowest approval rates, all below 45 per cent, were run by the Conservatives. They were Castle Point, Wycombe, Chiltern, Wokingham and Reigate and Banstead in the south east, and the Forest of Dean.

However, the government has confirmed it has dropped its affordable house building target from 70,000 to 55,000 a year in the next two years, despite the additional funding, as it is now paying ‘more of the cost per house’ due to the huge reduction in section 106 agreements and other forms of private investment. The government expects to complete 55,500 affordable homes this year and 56,450 in 2010/11, but only 13,500 a year will be for social rent rather than the 45,000 out of 70,000 homes originally planned. Communities and Local Government refused to provide a regional breakdown of the reduced targets.

According to the latest National Housing Planning and Advice Unit’s survey on housing, attitudes to new housing developments need to change ‘as a matter of urgency’. More than half of current homeowners (51 per cent) would object to new housing being built in their area, despite continuing home affordability issues where as many as 90 per cent of young people cannot afford an average first-time buyer’s house. By comparison less than a third of non-homeowners (31 per cent) would object. Despite the average house price fall of 22 per cent, almost nine out of ten young people cannot afford to buy an averagely priced first-time home.

The government is likely to break its promise to build 70,000 affordable homes a year by 2010-11 according to its own figures. A Guardian analysis of this week’s pledge to build more affordable housing indicates that the government will miss its target by at least 13,550 a year; while only 13,450 of the 56,500 new homes built a year will be council housing, down from 45,000 out of the original 70,000 planned. Figures also show that despite the government building fewer homes the programme will cost more money.