New home starts leap 63%

Published 21st Aug 2009

• Housebuilders begin nearly 30,000 homes in England in second quarter


The number of new homes being built in England rose by 63% in the second quarter of the year, but economists believe that a full recovery in the housing market will not happen until banks resume lending.

The Department for Communities and Local Government (CLG) said about 29,980 new homes were started in England during the three months to the end of June but the figure was still 9% lower than during the same period of 2008.

"Despite the economic pressures on them, construction companies and developers are working hard to keep the industry moving and these figures are evidence of that," said a CLG spokesperson. "But we are not complacent. There is still a lot more to do, which is why we recently announced an extra £1.5bn investment in affordable housing, to build an extra 20,000 new affordable and social homes as well as 10,000 market properties."

However, industry experts still believe this is not enough. Brian Berry, at the Federation of Master Builders, said: "Housing starts are 63% higher in Q2 compared to Q1 and that housing completions are 24% higher than Q1 is encouraging but the fact remains that housebuilding is still below 100,000 per annum compared to the government's annual target of 240,000.

"We are still not building enough homes to meet demand, which means there is still little hope for the 4.5 million people on council house waiting lists," he said. "To get the housebuilding industry back on its feet, the government needs to do all it can to restore mortgage liquidity because housebuilders can only build homes that people are in a position to buy."

He said Britain's builders were able to deliver the homes that were needed but people had to be able to get mortgages.

John Stewart, of the Homes Builders Federations, said: "Whilst the rises in housing starts and completions are encouraging, if any recovery is to be sustainable we will need to see the banks return to more sensible levels of mortgage lending so that people realise their ambitions of home ownership."

Source: ' 'Guardian' '

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