Constructing a housing recovery


Having read numerous recent articles on rising house prices I along with other commentators are hopeful that we are now all starting to feel a little more confident about the market at long last.

Predictions for lending are somewhere between £150bn to £158bn this year, and a quite ambitious £170bn in 2014 although we have yet to see the true impact of Mortgage Market Review on lenders. One of the key aspects is the technology and system changes required to handle it, and this could cause a slight slowdown in early 2014, while lenders concentrate on getting the required systems in place.

So with house prices around 12 per cent higher than the lows seen in the midst of the financial crisis, signs of a modest gain in employment, and with the Governor of the Bank of England Mark Carney’s recent statement on interest rates, things are looking brighter.

As always, there is a slight hurdle, and that is the availability of suitable properties to buy in an area that homebuyers want to live.

Building activity is still at subdued levels, with housing completions in England down 8 per cent in the first quarter compared with the same period of 2012 and around 40 per cent below the average number of quarterly completions in 2007.

Around half the number of homes we need, 130,000 approx are currently being built annually but we need 250,000 minimum. To put this number in context, in this year to June 2013, France saw 342,000 housing starts.

These figures show that housing remains in relatively short supply in the UK and with the time lag from land purchase, planning, building to the property reaching the homebuyer, this is not an issue that is going to be solved soon.