House building hits record low

The number of new homes being built fell to a record low during the last three months of 2008, figures from the Department of Communities and Local Government reveal today.

An estimated 16,310 were started in the December quarter 2008, down 27% on the previous quarter and 58% lower than the December quarter 2007.

This is the lowest level recorded by the Department of Communities and Local Government since it began collecting the data in 1980.

The biggest drop was seen in the private sector, with just 12,280 properties being started in the final quarter of the year, some 64% lower than the same period a year earlier.

Gillian Charlesworth, a spokeswoman for the Royal Institution of Chartered Surveyors, says: “The current financial crisis is making it almost impossible for developers to get the loan finance needed to deliver the UK’s housing needs for the future. If the current downward trend continues the government will be on target to build less than one third of the two million new homes needed by 2016.

“Compounding this is the current lack of mortgage finance for buyers, meaning developers are reluctant to commit to projects which may end up attracting nothing but a for sale sign.

“The government must take immediate action to ease restrictions on lending and work with the Homes and Communities Agency to increase development through Housing Associations. Failure to do this will result in serious undersupply problems both now and in the future.”