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New housing projects decline

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by Gill Montia
”New

Hometrack, the housing intelligence firm, has published a report in which it warns that in five years’ time the UK could be seeing fewer homes built than today.

According to the research, the number of new housing projects where work on site has commenced has fallen by 10% in England over the past 18 months.

The situation could worsen in the short-term, as the credit crisis deepens and the UK housing market continues its downturn.

Richard Donnell, director of research at Hometrack, believes that while more land needs to be made available for housing, landowners may be reluctant to sell in the current market because lower house prices will put a downward pressure on the value of land.

He also point out: “The fall in housing starts comes at a time when the primary focus is on increasing levels of house building as a means of combating affordability problems and helping those priced out of the market.”

The report highlights three factors that will influence the volume of new homes built over the next few years: the speed at which developers can react to the changing nature of demand; how landowners view the downward pressure on land values and how developers cope with new build planning policy as set out by local and national Government.

Mr Donnell concludes: “Left to its own devices the market may sort itself out in two or three years but a swift response by local planning authorities could make an important difference.”

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News posted: March 10, 2008

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