House building may fall 150,000 below government target

The number of new houses being built this year could come in at 150,000 below government targets, Assetz has claimed.

Stuart Law, chief executive of Assetz, says the number of new houses which started being built in January 2008 was down 40% on January last year.

He says: “If that carried on we would be down to about 90,000 new properties being started in 2008. This is in the face of government targets of 240,000 new properties a year.

“We estimate that there is already a housing shortage of around 400,000 to 500,000 properties.”

Law adds: “We think it will get far worse than that, far quicker.”

He highlighted statistics from the National House Building Council that show there were 150,000 homes built in 2007.

Law spoke out on housing supply, along with a panel of experts including mortgage industry research analysts and national economists, at today’s Great Housing Market Debate in London.

Law was the only guest at the event who believes property prices will rise this year.

Government policy on house building targets for new-build properties came under fire during the debate.

Some members of the panel warned that not only are new housing figures falling below government targets, the right kind of housing supply to meet demand is not being built.

Richard Donnell, director of research at Hometrack, says: “The trouble is we are stuck in a numbers game. This is about the structure of supply. Public policy is not about what is needed on the ground.”

David Miles, chief economist for Morgan Stanley, says: “The government is setting housing targets but it is not building them itself. It depends on whether house builders see it in their interests in building the amount of homes that the government wants them to do.”