As a result, housing in England is heading for a supply crisis far greater than expected according to propertyfinder.com. In fact, England will literally run out of homes this year. There will be 39,000 fewer homes than households by the end of 2009 on current trends. The picture will not improve until 2016.
What’s more, the number of new home starts plummeted to just 90,000 during the year as the recession crushed the housebuilding industry. This suggests that completions in the coming year are likely to miss the government’s target by well over 100,000 homes, according to the company.
Government promises of more social housing seem far-fetched too. Local authorities began building just 180 homes in the six months to the end of March, and although builders began work on 8,000 units of other social housing in the same period, this is no better than average for recent years.
Nicholas Leeming, director of propertyfinder.com warned of the consequences for housing market: “This means, despite the current slowdown, unless there is a major expansion in building, house prices can only go in one direction over the long term. And that is upwards. The government will have to relax restrictive planning laws, force local authorities to permit more construction, and people will have to accept more building in their area. If this does not happen, whole generations will be priced permanently out of the housing market.”
