Reporting quarter three results, a number of house builders said that they had seen a fall in demand for new build housing in recent months, with several reporting that they were struggling to sell existing properties.
There was concern that, if they were unable to sell existing properties, developers would be less keen to commit to building new properties, which would be bad news for the government and its promise to increase housing supply.
Publishing its interim results, Taylor Wimpey said: “Prices are stable, however we have seen reductions in both visitor and reservation levels which have been exacerbated by the recent turbulence in the financial markets. Over the last three months, we have continued to focus on maintaining our margin improvements rather than driving volume. Completion volumes for the year are expected to be around 5 per cent below the 2006 pro forma volume.”
Commenting on the concern, Neil Johnson, head of PR and policy at the Building Societies Association, said: “The talk is all about building more houses but this shows how difficult this actually is. Builders have got to get a good return – if they can’t do that, they just won’t build the homes. This is just simple market dynamics and the government can’t do anything about it.”
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