New-home construction slumps

21-08-2008

New-home construction slumps
The number of new housing starts in the England has slumped dramatically in the second quarter of the year, according to the latest research from the Department for Communities and Local Government (CLG).

While some 33,400 new homes were begun over the three months, this is some 19 per cent lower than the same period of last year.

However, the figures – which were collated by the Office for National Statistics (ONS) – show construction increased two per cent when compared with the first quarter of the year.

Specifically, private enterprise housing starts were 27 per cent lower than the June quarter of 2007.

In contrast, housing starts by Registered Social Landlords (RSL) have risen 56 per cent over the same period.

They are now at their highest quarterly level in eleven years.

Furthermore, housing completions in England fell by nine per cent from the previous quarter to an estimated 36,600 in the June quarter 2008.

Compared with the June quarter 2007, completions were down by 13 per cent.

Quarterly completions exceeded starts for the third quarter in a row, reports the CLG.

The figures are likely to provoke consternation among government officials, as they are well below targets set by prime minister Gordon Brown.

Shortly after coming to power last year, Mr Brown stated it was the government's aim to build two million new properties by 2016, with a further one million, carbon neutral, properties added by 2020.

"Putting affordable housing within the reach not just of the few but the many is vital both to meeting individual aspirations and to securing a better future for the country," Mr Brown said in July last year.

This equates to some 250,000 new properties added to the national housing stock each year, before 2016, in order for the government to meet its targets.

The news follows interim results from homebuilder Persimmon earlier today which illustrate a sharp fall in profits and a slowdown in prices and sales.

The company has announced 2,000 job losses to date this year, in line with a wider industry trend.

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