With the election now firmly out of the way, the Government can get on with what it is supposed to do – Govern and keep up with its election promises. As always, home building featured prominently in every party’s election manifesto, with almost wild promises on what will be built. Now that the dust has settled, are those in authority actually keeping up with the need for homes and how does this look for the future?

The plain answer on this question is a resounding ‘no’, home building is not keeping track of rising populations and is struggling to stay at even current levels of demand. Government statistics show that new-start house building has remained fairly consistent at between 32,000 and 44,000 per quarter since around 2014, however there is always a slight disconnect between new houses started and those completed (I.E. some projects are put on hold for a variety of reasons) but completions are now starting to outstrip start projects.

Interestingly, the majority of new house completions are within the private sector and have been rising quarter on quarter since 2014. Statistics for April to June of that year show that completions for the period numbered 23,040. The same period for April to June 2019 shows that completions rose to 36,150 – over 12,000 more for the same timeframe. 

Housing association builds and Local Authority properties have been doing less well, however.  The figures for Housing association build for the period April to June 2014 were measured at 5,750. Jump ahead to April to June 2019, and the figures reveal that housing association build have maintained their level at just 8,550 – a rise of less than 3,000 per quarter. Local Authority builds are even more dire rising from just 290 to 490 in the same two periods.

And all the time, the population requiring housing increases. The world’s population is expected to reach nearly 12 billion by the end of this century and with increased immigration – on top of a growing indigenous population – the need for new housing is becoming critical.

It is reckoned that house builders need to increase their stock by 1% per year to stay on top of demand, which doesn’t seem too bad, until you realise that the current housing stock is around 28 million properties (houses and flats).  So, to maintain balance, we need to increase levels by 280,000 units per year – every year!  Plainly, house builders both private and Local Authority are not matching that.

Through its election manifesto, the Government has committed to building at least a million homes over the next five years, and if they do that, it will make a huge contribution to the current housing stock. In doing so, it would ease much of the pain that first-time buyers are feeling since more affordable properties will exist, and that can only be good news. However, it remains to be seen if the Government can keep up with its end of the deal.

If you need advice on mortgage finance, talk to our experts at Grange Mortgages to discuss your options.