personal finance

UK housebuilding falls to slowest quarterly rate for three years


Housebuilding across England has fallen to the slowest quarterly rate for three years, according to official figures, despite a promise by the government for a homebuilding revolution.

Figures published by the housing ministry showed construction began on 37,220 homes in England in the three months to June – 8% down on the same period a year ago, and the lowest quarterly number of new home starts since 2016.

Annual new housing starts fell to 160,640 in June, 1% lower than a year ago.

The government has continued a pledge made under Theresa May to boost housebuilding amid a national shortage, with a target to build 300,000 homes a year.

The chancellor, Sajid Javid and Robert Jenrick, the housing secretary, unveiled plans at the Conservative party conference for a “revolution” in housing and infrastructure, announcing the relaxation of planning laws to boost the property market.

The decline in new housing starts comes as the British economy edges closer towards the first recession since the financial crisis amid uncertainty from Brexit and a slowing global economy.

Patrick Gower, a residential research associate at the estate agency Knight Frank, said: “Amid the current political turmoil housebuilders must make judgments about what the sales market will look like years from now.

“Most indicators suggest housing completions will continue to climb over the near term, but are very unlikely to meet the government’s annual target of 300,000.”

A survey of UK construction on Wednesday showed housebuilders cutting back on new work as a result of the economic and political turmoil. House prices are falling across London and the south of England, while growth in values elsewhere has also stalled.

Luke Murphy, the associate director at the IPPR thinktank said cuts to housing grants meant housing associations were more reliant on private sales, with a downturn in the private sector therefore also having an impact on affordable housing construction.

“Without a buoyant market to sell into, housebuilders are pulling back,” he added.

The number of new home starts has risen in recent years, from fewer than 120,000 a year in 2014 to the current levels, although they are still significantly short of an annual peak of 352,540 new dwellings in 1968.

John Healey, the shadow housing secretary, said the latest figures were a worrying sign for housebuilding, adding: “Falling housebuilding makes the case for a big public investment programme even stronger.”



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