Concerns of looming housing crisis as new-builds slow

The Momentum UK Team 25 February 2013

The government and developers must do more to increase the amount of affordable new homes being built in the UK to avoid wide scale future housing shortage, charities and campaign groups have warned.

Pressure comes after news of an 11% reduction in new homes being built in 2012. This means the total number of new-builds fell in 2012 to 98,280. Shelter, the housing charity has warned that figures of this nature could lead to a ‘housing crisis’ if the government and developers do not react.

This fall has seen figures nearing those experienced during the depth of the recession. The numbers from this period, from the year ending June 2009 are 75,000, much closer to the 2012 figures. Whereas the number of housing starts peaked in the year ending March 2006 at 183,000.

The National Housing Federation agreed with the comments from the housing charity Shelter, saying that more needed to be done in order to supply the huge demand in affordable homes.

A spokesperson for the government responded saying that ministers were "far from complacent".

The Home Buyers Federation, cited the “challenging environment” as a major contributing factor in the reduction of new builds. Claiming that it was in fact the lack of approved mortgages that was causing the drop."A lack of mortgage finance is the most important short-term issue and if buyers can't buy, builders can't build.”

It is hoped however that the NewBuy scheme, which aims to provide first time buyers with access to a 95% mortgage will go some of the way to generating future growth.

Campbell Robb, chief executive of Shelter, urged the government to use next month's Budget to unlock the finance to deliver more affordable family homes saying:

"Unless action is taken now, it's hard to see our housing crisis improving anytime soon,"

A spokesman from the Department for Communities and Local Government said:

"The government is far from complacent, which is why, despite the need to tackle the deficit, we're investing £19.5bn public and private funding in an affordable housing programme set to deliver 170,000 homes, putting £1.3bn into unlocking stalled sites and building the infrastructure we need and making enough formerly used, surplus public sector land available to deliver 33,000 new homes."