Call to tackle new homes 'crisis'

New homesBold action to kick-start the housebuilding industry has been called for after figures showed the number of new properties started in England has fallen to a three-year low.

A total of 21,540 homes were begun during the three months to the end of June, a 10% fall compared with the previous quarter, Department for Communities and Local Government figures showed.
The decline is the second in a row in which housebuilding starts have fallen compared with the previous quarter and the latest figure is the lowest since the three months to June 2009.

Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors (Rics), said the "paltry" number of new starts over the three months is barely one-third of what is generally accepted as the required number to meet growing demand.

He said: "These figures demonstrate the widening scale of the problem in delivering sufficient new housing... It's clear something bold is desperately needed to address the current housing crisis."

Within the latest total, housebuilding by private developers declined by 7% on the previous quarter, while starts by housing associations fell by 23%. The number of new properties completed also dipped by 6% to 29,470 in the three months to June, following increases seen during the previous two quarters.

The industry was hit hard by the credit crunch as developers struggled to raise the finance they needed, while consumers could not get mortgages to buy new homes.

From the beginning of 2008, there was a period of rapid decline in building starts to a trough in the spring of 2009. Completions fell more slowly than starts but over a longer period. The industry began to recover from 2009 and over the last year-and-a-half completions have tended to increase slightly, although starts have shown decreases over the first half of 2012.

The Government launched its NewBuy Guarantee scheme in March, which has been forecast to help as many as 100,000 people buy a new-build home with a deposit of 5% or 10% rather than the 20% typically demanded by lenders.

Campbell Robb, chief executive of Shelter, said: "These shocking figures make it impossible for the Government to ignore the need for radical action to boost housebuilding. With a flatlining construction sector, building significant numbers of new, genuinely affordable homes would create jobs and stimulate the economy."

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